Question:
Andrew Corporation is evaluating a capital investment that would result in a $30,000 higher contribution margin benefit and increased annual personnel costs of $20,000. The effects of income taxes on the net present value computation on these benefits and costs for the project are to
1. Decrease both benefits and costs.
2. Have no net effect on either benefits or costs.
3. Decrease benefits but increase costs.
4. Increase benefits but decrease costs.