Question 1. A new machine being considered to replace an old one will decrease the firm's operating costs by $10,000 annually. The firm's tax rate is 40%. For capital budgeting, what is the annual after tax cash flow associated to this savings?
Question 2. A firm is considering a project with data shown below. What is the project's operating cash flow for year 1?
Sales revenues $35,000
Depreciation $10,000
Other operating costs (excl dep) $17,000
Interest Exp $4,000
Common stock divs $2,000
Tax rate 35%
Question 3. A firm is in the final year of a project. The equipment originally cost $20,000 of which 75% has been depreciated. The equipment can be sold today for $6,000 and its tax rate is 40%. What is the net equipments after-tax salvage value for use in capital budgeting analysis?