Whitestone Products is considering a new project whose data are shown below. The required equipment has a 3-year tax life, and the accelerated rates for such property are 33.33%, 44.45%, 14.81%, and 7.41% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year expected operating life. What is the project's Year 4 cash flow?
Equipment cost (depreciable basis)$70,000
Sales revenues, each year$42,500
Operating costs (excl. deprec.)$25,000
Tax rate25.0%
A. $13,016
B. $13,701
C. $14,422
D. $15,143
E. $15,900
Answer: C
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