Question 1) For a capital budgeting proposal, assume this year's cash sales are forcast to be $220, cash expenses $130, and depreciation $80. Assume the firm is in the 30% tax bracket. Is it possible to determine the projects after tax cash flow.
Question 2) A restaurant is considering an expansion. Construction will cost $90,000 and will be depreciated to zero, using straight line depreciation, over 5 years. Earnings before depreciation are expected to be $20,000 in each of the next 5 years. The restaurant's tax rate is 34%. What are the projects cash flows. Please expalin calculation if possible.