What is the project free cash flow

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Vandelay Industries is considering a new project with a 10 -year life with the following cost and revenue data. This project will require an investment of $110,000 in new equipment. This new equipment will be depreciated down to zero over 10 years using the simplified straight-line method and has no salvage value. This new project will generate additional sales revenue of $142,000 while additional operating costs, excluding depreciation, will be $65,000. Vandelay's marginal tax rate is 31 percent. What is the project's free cash flow in year 1?

Reference no: EM131569389

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