Homework Answers
Depreciation Value on 4 th year=Initial Cost*4th year depreciation rate=90000*7.41%= $6669
Operating Profit= Sales-Cost=52500-23000=29500
Taxable income= Operating profit-Depreciation=29500-6669=$22831
Tax= taxable income* tax rate=22831*35%=$7990.85
Cash flow after tax= taxable income-tax+depreciation=22831-7990.85+6669=$21509.15
Hence, project's year 4 cash flow is $21509.15
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