Assume a company can buy a new facility that will cost $2,250,000 and is expected to generate $555,000 a year in revenue for the first three years and $325,000 a year in revenue for the next three yeaCalculate the resulting annual operating cash flows for the company for each of the first three years and the next three years, assuming a corporate tax rate of 15%.
a) Year 1: $525,750, Year 2: $525,750, Year 3: $525,750, Year 4: $261,250, Year 5: $261,250, Year 6: $261,250
b) Year 1: $525,750, Year 2: $525,750, Year 3: $525,750, Year 4: -$195,000, Year 5: -$195,000, Year 6: -$195,000
c) Year 1: -$195,000, Year 2: -$195,000, Year 3: -$195,000, Year 4: $261,250, Year 5: $261,250, Year 6: $261,250
d) Year 1: -$195,000, Year 2: -$195,000, Year 3: -$195,000, Year 4: -$425,000, Year 5: -$425,000, Year 6: -$425,000