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

question 57

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 or $15,900 and the tax rate is 35 percent?

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

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Definitions:

Significant Risk

The potential for a substantial negative outcome, affecting health, safety, or the environment.

Shareholders Votes

The rights of shareholders to vote on corporate matters, such as electing directors or approving policies, typically based on the number of shares they own.

Trust Holdings

Assets held in a trust by one party for the benefit of another, including real estate, stocks, bonds, and other investments.

Tax Rate

The percentage at which an individual or entity is taxed on their income or property.