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Zeta Software Is Considering a New Project Whose Data Are

question 30

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Zeta Software is considering a new project whose data are shown below. The required equipment has a 3-year project life, after which it will be worthless, and it has a constant deduction rate over 3 years. Revenues and cash operating costs are expected to be constant over the project's 3-year life. What is the project's operating cash flow for Year 1? Equipment cost$75,000
Capital cost allowance$25,000
Sales revenues, each year$60,000
Cash operating costs$25,000
Tax rate35.0%

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Definitions:

Stone Tools

Prehistoric tools made from stone by early humans, used in hunting, cutting, and as weapons.

Mammals

Warm-blooded vertebrates characterized by the presence of mammary glands which females use to nurse their young, fur or hair, and three middle ear bones.

Characteristics

Features or qualities distinguishing a person, object, or phenomenon from others.

Nonskeletal Adaptations

Changes in organisms that involve functional or physiological modifications rather than changes to the skeletal structure.

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