# Perkins, Inc., Is Considering An Investment Of $366,000$366,000 In An Asset With An Economic Life Of 5 Years.

Perkins, Inc., Is Considering An Investment Of $366,000$366,000 In An Asset With An Economic Life Of 5 Years. The Firm Estimates That The Nominal Annual Cash Revenues And Expenses At The End Of The First Year Will Be $246,000$246,000 And $71,000$71,000, Respectively. Both Revenues And Expenses Will Grow Thereafter At The Annual Inflation Rate Of 2 Percent.

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Perkins, Inc., is considering an investment of$366,000in an asset with an economic life of 5 years. The firm estimates that the nominal annual cash revenues and expenses at the end of the first year will be$246,000and$71,000, respectively. Both revenues and expenses will grow thereafter at the annual inflation rate of 2 percent. The company will use the straight-line method to depreciate its asset to zero over five years. The salvage value of the asset is estimated to be$46,000in nominal terms at that time. The one-time net working capital investment of\$10,500is required immediately and will be recovered at the end of the project. The tax rate is 21 percent. What is the project&#39;s total nominal cash flow from assets for each year? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole dollar, e.g., 32.)