A project will cut firm's operating costs by $50,000. The project requires an initial investment...
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A project will cut firm's operating costs by $50,000. The project requires an initial investment of $30,000 and be depreciated using straight-line depreciation to a zero book value over the 4-year life of the project. The company has a marginal tax rate of 35 percent. What is the operating cash flow of the project using the tax shield approach? a. $40,450 b. $42,800 c. $38,930 d. $35,125
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