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34. Borin Incorporated is considering a new project whose data are shown below. The required equipment has a 3-year tax life,

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Answer #1

Sales   33500  
Less: operating costs   -25000  
Less: Depreciation   -4900  
(70000*7%)      
_______________________________________      
EBIT   3600  
less : Taxes (35%)   -1260  
_______________________________________      
Profit after tax   2340  
Add: Depreciation   4900  
_______________________________________      
Year 4 CF   7240  
_______________________________________      
So answer is c, $7240      
      

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