Solution to Comprehensive Problems.docx

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Solution to Comprehensive Problems Annual depreciation expense, when it is MACRS always assume zero salvage book value when calculating annual depreciation so you depreciate until 0: Year 1: .1429 x \$1million = \$142,900 Year 7: .0893 x \$1million = \$89,300 Year 8: .0446 x \$1million = \$44,600 OCF= (Revenue-expenses) (1-Tax rate) + Annual Depreciation x (Tax rate) NCF=OCF+CF from capital investment & disposal + CF from working capital changes
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• Fall '08
• CASHMAN

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