Houdini Entertainment Corp. provides premier magic shows. The company is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $148,400. The equipment will have an initial cost of $530,000 and have a 5-year life. If the salvage value of the equipment is estimated to be $12,000, what is the annual net cash flow?

Multiple Choice

• $136,400

• $44,800

• $252,000

• $160,400