KADS. Inc has spent $490,000 on research to develop a new computer game. The firm...
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KADS. Inc has spent $490,000 on research to develop a new computer game. The firm is planning to spend $290,000 on a machine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated, they total $59,000. The machine has an expected life of three years, a $84.000 estimated resale value, and falls under the MACRS seven-year class life. Revenue from the new game is expected to be $690,000 per year, with costs of $340,000 per year. The firm has a tax rate of 21 percent, an opportunity cost of capital of 12 percent, and it expects net working capital to increase by $145,000 at the beginning of the project What will the cash flows for this project be? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Answer is complete but not entirely correct. Year 0 1 2 3 FCF S (494,000.00 $ 286,973.14 S 294.448.72 $ 289,318.42 X
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