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A $1,000,000 investment is depreciated using a seven-year MACRS class life.
• It requires $150,000 in additional inventory and will increase accounts payable by $50,000.
• It will generate $400,000 in revenue and $150,000 in cash expenses annually, and the tax rate is 40%.
• What is the incremental cash flow in years 0, 1, 7, and 8?
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