Solutions to Chapter 1

Total cash flow = Operating cash flow + cash flow associated with investments. At time 0, the cash flow from the investment is: ($40,000. When the grill is sold at the end of year 3, its book value will be $2,964, so the sale price, net of tax, will be: $10,000 ( [0.35 ( ($10,000 ( $2,964)] = $7,537.40. Therefore, total cash flows are: Time ... ................
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