6,

A firm has invested $800 in a new machine that is expected to generate cash flows over the next 4 years. The machine will be depreciated on a straight line basis down to zero by the end of its life. The firm projects their annual cash inflows at $650 per year and annual cash outflows at 280 per year. Assuming the tax rate of 33%, determine the firm's cash flow next year.

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7, A distributor of computer software instruction manuals plans to expand distribution. Annual sales are currently $230000 and are expected to be $290000 one year from today. Assuming that expenses are 75% of sales each year, what is the cash flow one year from today if the tax rate is 34%? Assume straight line depreciation of $25,000.

$______