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Your firm is considering the purchase of a machine that costs $10,000. The machine has a useful life of 5 years over which it will
Your firm is considering the purchase of a machine that costs $10,000. The machine has a useful life of 5 years over which it will be depreciated using straight-line depreciation assuming zero salvage value. During the life of the machine, it is expected to generate revenues of $8,000 and cost $3,000 each year. What is the after tax cash flow in year 3, assuming a tax rate of 30%?
a $2,100
b $3,100
c $4,100
d$5,100
e$6,100
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