What is the operating cash flow in each year at the accounting break-even quantity?
A project requires an initial investment of $25 million in new equipment. The equipment is assumed to be depreciated straight-line to zero over its 25-year life. The pre-tax salvage value of the equipment at the end of the project is assumed to be zero. No additional net working capital is required for this project. The appropriate discount rate is 10%.
What is the operating cash flow in each year at the accounting break-even quantity?