Determine the projects cash flow in each year

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Kolby’s Korndogs is looking at a new sausage system with an installed cost of $625,000. This cost will be depreciated straight line to zero over the project’s five-year life, at the end of which the sausage system can be scrapped for $95,000. Sales minus costs will be $183,000 per year, and the system requires an initial investment in net working capital of $41,000. If the tax rate is 34 percent, determine the project’s cash flow in each year.

Reference no: EM131014856

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