Question

Laurel’s Lawn Care, Ltd., has a new mower line that can generate revenues of $141,000 per year. Direct

production costs are $47,000, and the fixed costs of maintaining the lawn mower factory are $18,500 a year. The factory originally cost $0.94 million and is being depreciated for tax purposes over 20 years using straight-line depreciation. Calculate the operating cash flows of the project if the firm’s tax bracket is 40%. (Enter your answer in dollars not in millions.)

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