Problem 11-6 A four-year project has cash flows before taxes and depreciation of $12,000 per year....

Problem 11-6

A four-year project has cash flows before taxes and depreciation of $12,000 per year. The project requires the purchase of a $50,000 asset that will be depreciated over five years straight-line. At the end of the fourth year the asset will be sold for $15,000. The firm's marginal tax rate is 33%. Calculate the cash flows associated with the project. (For convenience assume the gain on the sale of the asset is taxed at 33%.) Use a minus sign to indicate negative cash flows or decreases in cash, if required.

Year	Net Cash Flow
0	$
1	$
2	$
3	$
4	$

Expert Solution

jeff jeffy answered 2 years ago

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