Each year for eight years, an investment will generate incremental sales of $8,000 and cash - 4842

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Request Description

Each year for eight years, an investment will generate incremental sales of $8,000 and cash operating expenses of $2,500. The applicable tax rate is 30% and depreciation is $2,000. What is the net cash flows for each of the eight years? 

a. $8,000 

b. $6,500 

c. $4,500 

d. none of these 

Solution Description

Each year for eight years, an investment will generate increme