Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. daisy company is considering the purchase of equip

Daisy Company is considering the purchase of equipment for $400,000. The equipment will have a...

60.1K

Verified Solution

Question

Accounting

image

Daisy Company is considering the purchase of equipment for $400,000. The equipment will have a ten year life with no terminal salvage value. Straight - line lepreciation will be used for tax purposes. It is expected that the equipment will generate annual sales of $180,000 and annual production costs, exclusive of lepreciation, of $120,000. The tax rate is 40%. What is the net annual after - tax cash flow from the equipment? A. $52,000 cash inflow B. $60,000 cash inflow C. $16,000 cash inflow D. $36,000 cash inflow

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students