Clemson software, Financial Management

Clemson Software is considering a latest project whose data are given below.  The needed 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 accepted to be constant over the project's 3-year life.  What is the project's Year 1 cash flow?

Equipment cost (depreciable basis)         $65,000

Straight-line depreciation rate                 33.333%

Sales revenues, each year                      $60,000

Operating costs (excl. deprec.)                $25,000

Tax rate                                               35.0%



Posted Date: 3/26/2013 7:57:13 AM | Location : United States

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