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A Project Is Expected to Increase a Firm's Sales Revenue

Question 8

Multiple Choice

A project is expected to increase a firm's sales revenue by $12,000 annually, decrease it cash expenses by $18,000 annually, and increase its depreciation by $10,000 annually. Given this information, what is the project's expected annual net cash flow? Use a 40% effective tax rate.


A) $400
B) $12,000
C) $22,000
D) $18,000

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