Phone Home, Inc. is considering a new 6-year expansion project that requires an initial fixed...
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Phone Home, Inc. is considering a new 6-year expansion project that requires an initial fixed asset investment of $5,994,000. The fixed asset falls into the five-year MACRS class and will be worthless at the end of its life. The MACRS rates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, 5.76% for years 1-6, respectively. The project is estimated to generate $5,328,000 in annual sales, with costs of $2,131,200. The tax rate is 16 percent. What is the operating cash flow for the fourth year of this project?
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