Question
30. Project G has cash inflows of $800 each year and cash outflows of $240 each year. Assuming a 30% tax rate, which of the
30. Project G has cash inflows of $800 each year and cash outflows of $240 each year. Assuming a 30% tax rate, which of the following comes closest to Project Gs cash flow in year 1 if we assume straight line depreciation of $50?
a. $407
b. $410
c. $413
d. $416
e. $419
29. Your firm is considering the purchase of a machine that costs $10,000. The machine has a useful life of 5 years over which it will be depreciated using straight-line depreciation assuming zero salvage value. During the life of the machine, it is expected to generate revenues of $8,000 and cost $3,000 each year. What is the after tax cash flow in year 3, assuming a tax rate of 30%?
a. $2,100
b. $3,100
c. $4,100
d. $5,100
e. $6,100
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