$63,800 $69,000 $73,600 $72,800 2.50 0.47 0.09 1.27 The Wet Corp. has an investm
ID: 2750999 • Letter: #
Question
$63,800
$69,000
$73,600
$72,800
2.50
0.47
0.09
1.27
The Wet Corp. has an investment project that will reduce expenses by $30,000 per year for 3 years. The project's cost is $20,000. If the asset is part of the 3-year MACRS category (33.33% first year depreciation) and the company's tax rate is 27%, what is the cash flow from the project in year 1? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)
$25,160
$24,480
$23,150
$23,700
$49,898
$69,298
$59,698
$55,098
Firm X is considering the replacement of an old machine with one that has a purchase price of $60,000. The current market value of the old machine is $27,000 but the book value is $34,000. The firm's tax rate for ordinary income is 36%. What is the net cash outflow for the new machine after considering the sale of the old machine?
$30,480
$42,830
$27,080
$36,350
Assume a corporation has earnings before depreciation and taxes of $90,000, depreciation of $20,000, and that it has a 30 percent tax bracket. What are the after-tax cash flows for the company?Explanation / Answer
1)
Earnings before depreciation and taxes $ 90,000 Less: Depreciation $ 20,000 Profit before tax $ 70,000 Less: Tax $ 21,000 Profit after tax $ 49,000 Add: Depreciation $ 20,000 After tax cash flows $ 69,000Related Questions
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