Proof Software Is Considering a New Project Whose Data Are

Multiple Choice

Proof Software is considering a new project whose data are shown below.The equipment that would be used has a 3-year tax life, and the allowed depreciation rates for such property are 33%, 45%, 15%, and 7% for Years 1 through 4.Revenues and other operating costs are expected to be constant over the project's 10-year expected life.What is the Year 1 cash flow?

Equipment cost (depreciable basis) $65,000
Sales revenues, each year$60,000
Operating costs (excl. depreciation) $25,000
Tax rate35.0%

A) $30,258
B) $31,770
C) $33,359
D) $35,027
E) $36,778