Merekin Corp is contemplating the purchase of a machine that will increase revenues by $1 500 The cost of the

Question

Merekin Corp. is contemplating the purchase of a machine that will increase revenues by $1,500. The cost of the

new machine is $2,000. The machine has a 5-year class life and the project will last 5 years. After the project is over, the firm will sell the machine for $500. The firm’s cost of capital is 13% and the firm’s marginal tax rate is 40%. What is the firms Operating Cash Flow in year 2?

$1,100

$660

$1,060

none of the answers are correct

$1,300

Finance