1F.12
12.You have the following revenues and expenses for year 4 of a 5 year project:
| Revenues | $2000 |
| Operating Expenses | $1000 |
| Depreciation Expense | $1500 |
Your equipment has one year of straight-line depreciation left on it (year 5), but you have received an offer to buy it for $2500. You think this is a good offer, but you need to determine what your net after-tax cash flow this year will be if you accept it. Your company's tax rate is 40%. You have no other income besides this project this year, if you sell the machine, what will your net after-tax cashflow be for the year? (7 pts)