What is the undiscounted cash flow in the final year of an investment, assuming $10,000 after-tax cash flows from operations, $1,000 from the sale of a fully depreciated machine, $2,000 initial requirement for additional working capital, and a 35% tax rate?
A) $8,450
B) $12,600
C) $12,650
D)$14,000

Question

Quizplus · Accepted Answer

Cash flow_Final = $10,000 + $2,000 + $1,000 × (1 - .35) = $12,650

What Is the Undiscounted Cash Flow in the Final Year