New Project Cash Flow
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Scott Corporation's new project calls for an investment of $10,000. It has an estimated life of 10 years. The IRR has been calculated to be 15 percent. If cash flows are evenly distributed and the tax rate is 40 percent, what is the annual before-tax cash flow each year? (Assume depreciation is a negligible amount.)
a. $1,993
b. $3,321
c. $1,500
d. $4,983
e. $5,019
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New Project Cash Flow is illustrated.
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- MBA, Indian Institute of Finance
- Bsc, Madras University
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