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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The expert examines Zeta Software for project's operating cash flow for year 1.
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Equipment Cost [Depreciable Basis]: $75,000
Straight-line Depreciation Rate: 33.33%
Sales Revenues, Each Year: ...
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