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    Zeta Software - What is the project's operating cash flow for Year 1?

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    Zeta Software is considering a new project whose data are shown below. The required equipment has a 3-year tax life, after which it will be worthless, and it will be depreciated by the straight-line method over 3 years. Revenues and other 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 [Depreciable Basis]: $75,000
    Straight-line Depreciation Rate: 33.33%
    Sales Revenues, Each Year: $60,000
    Operating Costs [Excluding Depreciation]: $25,000
    Tax Rate: 35.0%

    A. $29,196
    B. $29,945
    C. $30,712
    D. $31,500
    E. $32,287

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    https://brainmass.com/business/discounted-cash-flows-model/zeta-software-projects-operating-cash-flow-year-139404

    Solution Preview

    Equipment Cost [Depreciable Basis]: $75,000
    Straight-line Depreciation Rate: 33.33%
    Sales Revenues, Each Year: ...

    Solution Summary

    The expert examines Zeta Software for project's operating cash flow for year 1.

    $2.19

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