After-Tax Cash Flows

Using the data that is shown below -(a) calculate the individual after-tax cash flow effect of each relevant item in each independent situation, and (b) sum the individual after-tax cash flows in each situation to determine the overall net after-tax cash flow.

Average Rate of Return Thompson Furniture is considering the purchase of equipment for $120,000. The equipment will expand the company's production and increase revenue by $30,000 per year. Annual cash operating expenses will increase by $7,000. The equipment's useful life is 10 years with no salvage value. Thompson uses straightline depreciation. The income tax rate is 35%. What is the average rate of return on the investment? Do not use negative signs with your answers. Increase in revenue $ Increase in expenses Pretax income from investment Income tax expense OOOOO Net income from investment $ Round answer to the nearest whole percentage, if applicable. Average rate of return on investment 0 %