General Inc. is considering buying a $220,000 production machine. It would be depreciated (simplified straight line) for 10 years. This investment would allow the firm to increase sales by $140,000 per year. Operating expenses would increase by $70,000 per year also. The corporate tax rate is 21%. What is the annual cash flow for the project? $170,520 $68,000 $75,720 $71,100 $59,920

General Inc. is considering buying a $220,000 production machine. It would be depreciated (simplified straight line) for 10 years. This investment would allow the firm to increase sales by $140,000 per year. Operating expenses would increase by $70,000 per year also. The corporate tax rate is 21%. What is the annual cash flow for the project? $170,520 $68,000 $75,720 $71,100 $59,920

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 5P

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