Equipment costs $78,849 Installation costs $ 7,266 Tax rate 35% Change in operating revenues $36,284/year...

Equipment costs       $78,849
Installation costs      $ 7,266
Tax rate      35%
Change in operating revenues      $36,284/year for five years
Sold in year six      $ 4,640
MACRS 3-year class depreciation (33%, 45%, 15%, 7%)
Calculate the incremental operating cash inflow in year one. (Round answer to nearest dollar)

Solutions

Expert Solution

Particulars	Amount
Revenue	36,284
Less: depreciation	(28,418)
PBT	7,866
Less: tax	(2,753)
Net income	5,113
Add: depreciation	28,418
Cash flow for year 1	30,778

Answer is $30,778

jeff jeffy answered 1 year ago

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