Zeta Software is considering a new project whose data are shown below. The required equipment has a 3-year project life, after which it will be worthless, and it has a constant deduction rate over 3 years. Revenues and cash 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$75,000
Capital cost allowance$25,000
Sales revenues, each year$60,000
Cash operating costs$25,000
Tax rate35.0%
A) $29,196
B) $29,945
C) $30,712
D) $31,500

Question

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The Answer of Zeta Software is considering a new project whose data are shown below. The required equipment has a 3-year project life, after which it will be worthless, and it has a constant deduction rate over 3 years. Revenues and cash 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$75,000
Capital cost allowance$25,000
Sales revenues, each year$60,000
Cash operating costs$25,000
Tax rate35.0%
A) $29,196
B) $29,945
C) $30,712
D) $31,500

Zeta Software Is Considering a New Project Whose Data Are