National Manufacturing Company is considering buying some new equipment that would allow for increased sales of its product. The incremental impact of the proposed $400,000 investment is shown below using straight-line depreciation and an expected useful life of four years for the equipment. The company has a minimum desired rate of return of 14%.

Revenues $500,000

Nondepreciating expenses $300,000

Depreciation $100,000

Total expenses $400,000

Taxable income $100,000 Income tax (40%) $40,000

Net income $60,000

Question 9: The annual cash inflows expected from the project are _____

Question 9 options:

$100,000

$40,000

$120,000

$140,000

$160,000