KADS, Inc. has spent $340,000 on research to develop a new computer game. The firm is planning to spend $140,000 on a ma

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Kads Inc Has Spent 340 000 On Research To Develop A New Computer Game The Firm Is Planning To Spend 140 000 On A Ma 1 (359.65 KiB) Viewed 21 times

KADS, Inc. has spent $340,000 on research to develop a new computer game. The firm is planning to spend $140,000 on a machine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated; they total $44,000. The machine has an expected life of three years, a $69,000 estimated resale value, and falls under the MACRS seven-year class life. Revenue from the new game is expected to be $540,000 per year, with costs of $190,000 per year. The firm has a tax rate of 21 percent, an opportunity cost of capital of 11 percent, and it expects net working capital to increase by $70,000 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.) Year FCF 0 (254,000.00) X Answer is complete but not entirely correct. 1 220,517.44 × $ 2 228,024.64 × $ 3 366,457.92 x