A Project Has an Annual Operating Cash Flow of $52,620

question 88

Multiple Choice

A project has an annual operating cash flow of $52,620.Initially, this four-year project required $5,160 in net working capital, which is recoverable when the project ends.The firm also spent $39,700 on equipment to start the project.This equipment will have a book value of $17,014 at the end of Year 4.What is the cash flow for Year 4 of the project if the equipment can be sold for $15,900 and the tax rate is 35 percent?

• A)$63,749.90
• B)$73,680.00
• C)$74,069.90
• D)$73,862.00
• E)$73,290.10

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Definitions:

Coupon Rate

The interest a bond pays each year, quantified as a percentage of its face value.

Coupon Rate

The annual interest rate paid by a bond issuer to its bondholders, expressed as a percentage of the bond's face value.

Yield To Maturity

The total return expected on a bond if held until its maturity date, including all remaining coupon payments and principal repayment.

Remaining Maturity

The amount of time left until a financial instrument, such as a bond, reaches its maturity date and the principal is due to be repaid.