kimeko_walker
New member
A company is considering investing in a piece of machinery which will cost $500,000. It will provide an additional $160,000 in sales each year and its annual operating expenses are expected to be $35,000. The machine will be depreciated on a straight-line basis over a 10 year life with no estimated salvage value. The company has a 40% tax rate. What is the net cash flow for the year with regard to this piece of machinery assuming that taxes are paid in the year in which they are incurred?