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KADS, Inc. has spent $330,000 on research to develop a new computer game. The firm is planning to spend $193,000 on a machine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated; they total $43,000. The machine has an expected life of three years, a $68,000 estimated resale value, and falls under the MACRS seven-year class life. Revenue from the new game is expected to be $593,000.00 per year, with costs of $243,000.00 per year. The firm has a tax rate of 30 percent, an opportunity cost of capital of 0 percent, and it expects net working capital to increase by $93,000.00 at the beginning of the project.

What will the cash flows for this project be?

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Category:- Basic Finance
Reference No.:- M9219748

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