Question: Nokela Industries purchases a $36.8 million cyclo-converter. The cyclo-converter will bedepreciated by $9.2 million per year over four years, starting thisyear. Suppose Nekelas tax rate is 40%.
a. What impact will the cost of the purchase have on earnings foreach of the four years?
b. What impact will the cost of the purchase have on the firms cash flow for the next four years