Question 3 (1 point) Horace's Horse Harness Co is considering a new project that will last for 3 years and whose data ar

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Question 3 1 Point Horace S Horse Harness Co Is Considering A New Project That Will Last For 3 Years And Whose Data Ar 1 (46.42 KiB) Viewed 12 times

Question 3 (1 point) Horace's Horse Harness Co is considering a new project that will last for 3 years and whose data are shown below. The company would purchase equipment at $200,000 plus $5,000 for installation costs. The equipment is classified in the 3-year class and will be depreciated under MACRS (The percentages are 33.33%, 44.45%. 14.81%, and 7.41%, respectively). . The company believes that at the end of the 3rd year, the equipment can be sold for $(c). .Net working capital will increase immediately by $30,000 and be recovered at the end of the project. . Sales $175,000 Other operating costs $ 40,000 Tax rate 35% What are the annual operating cash flows for year 2? (HINT- you ONLY need to calculate OCF for year 2) Your Answer: Answer Question 4 (1 point) With Capital Budgeting projects, many cash flows are considered - and some are not. 1. Define incremental cash flow 2. Define either complementary or erosion cash flow-state if it is an incremental cost-give a brief example 3. Define sunk cost-state if it is an incremental cost-give a brief example Answer 1 N