QUESTION 4 Tank Ltd is considering undertaking the purchase of a new piece of equipment. The equipment costs $35,000 to purchase today and for tax purposes must be depreciated down zero over its 5 year useful life using the straight- line method. If Tank is actually forecasting a salvage value of $9,000 after 4 years, what is the net cash flow (after tax) from selling the equipment in year 4? Assume the tax rate is 30%. 7600 8400 9000 7000 QUESTION 5 LabraDo is considering launching a new compostable toy for Labradors. After conducting a $1000 survey across its customers, the company expects that the new product will be in high demand and generate sales of $125,000 a year. The production costs of the toys are 30% of sales per year. Production of the toys will require an initial capital investment of $300,000 and will be depreciated straight-line over the life of the project (5 years). Assuming a tax rate of 35%, what is the after-tax cash flow in year 3? 79250 76875 35875 77875