Daly Publishing Corporation recently purchased a truck for $48,000. Under MACRS, the first years depreciation was $9,600. The truck drivers salary in the first year of operation was $70,800. The companys tax rate is 30 percent.

Required:

1. 1-a. Calculate the after-tax cash outflow for the acquisition cost and the salary expense.

2. 1-b. Calculate the reduced cash outflow for taxes in the first year due to the depreciation.