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We're considering a new product line. The new products are expected to generate sales of $750000 per year for the next 5 years. It is expected that during this 5-year period, the firm鈥檚 existing product lines will lose $250000 per year. The new line will require no additional equipment but an additional inventory of $10000 per year in years 1 through 4. However, the new line will require an additional $80000 per year in operating expenses, and $45000 per year in salaries and wages. If the firm鈥檚 tax rate is 30%, what is the annual project cash flow?

a. 262500
b.375000
c.272500
d.38500

Thank you in advance if you can help!

I cannot give you any solid help, except for advice, which is:
Visit two banks (prospective lenders) and ask both this same question. Even if I was able to give an exact answer to your question, a lending institution would still "gin up" there own figures.

Do your own homework!

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