Your company, CSUS Inc., 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%, 45%, 15%, and 7% 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
|
35.0%
|
a. $11,814
b. $12,436
c. $13,090
d. $13,745
e. $14,432