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Whitestone Products Is Considering a New Project Whose Data Are

Question 23

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Whitestone Products is considering a new project whose data are shown below.The required equipment has a 3-year tax life, and the accelerated rates for such property are 33.33%, 44.45%, 14.81%, and 7.41% for Years 1 through 4.Revenues and other operating costs are expected to be constant over the project's 10-year expected operating life.What is the project's Year 4 cash flow?  Equipment cost (depreciable basis)  $70,000 Sales revenues, each year $42,500 Operating costs (excl. deprec.)  $25,000 Tax rate 25.0%\begin{array}{lr}\text { Equipment cost (depreciable basis) } & \$ 70,000 \\\text { Sales revenues, each year } & \$ 42,500 \\\text { Operating costs (excl. deprec.) } & \$ 25,000 \\\text { Tax rate } & 25.0 \%\end{array}


A) $13,016
B) $13,701
C) $14,422
D) $15,143
E) $15,900

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