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Ernie's Electrical Is Evaluating a Project That Will Increase Sales

Question 73

Multiple Choice

Ernie's Electrical is evaluating a project that will increase sales by $48,000 and costs by $16,000.The project will initially cost $89,000 for fixed assets that will be depreciated straight-line to a zero book value over the 6-year life of the project.The applicable tax rate is 34 percent.What is the project's annual operating cash flow?


A) $23,300.13
B) $21,450.87
C) $26,163.33
D) $22,406.67
E) $18,180.09

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