Clemson Software is considering a new project whose data are shown below. The required equipment has a 3-year tax life, after which it will be worthless, and it will be depreciated by the straight-line method over 3 years. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's Year 1 cash flow? Equipment cost (depreciable basis) $65,000Straight-line depreciation rate 33.333%Sales revenues, each year $60,000Operating costs (excl. depreciation) $25,000Tax rate 35.0%a. $28,115b. $28,836c. $29,575d. $30,333e. $31,092
Business
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