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    Fool Proof Software. What is the operating cash flow for Year 1?

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    Fool Proof Software is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, and the MACRS rates for such property are 33%, 45%, 15%, and 7% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year life. What is the operating cash flow for Year 1?

    Sales Revenues, Each Year: $60,000
    Equipment Cost [Depreciable Basis]: $65,000
    Operating Costs Excluding Depreciation: $25,000
    Tax Rate: 35.0%

    A. $30,258
    B. $31,770
    C. $33,359
    D. $35,027
    E. $36,778

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    Depreciation for the first year = 33% of ...

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