What is the after-tax net cash inflow on the investment


The Sip & Dip Donut company is considering the acquisition of a new automatic donut dropper for $600,000. The machine will have a six-year life and will produce before tax cash savings of $200,000 each year. The asset is to be depreciated using the straight-line method with no salvage value. The company's tax rate is 40 percent. what would be the after-tax net cash inflow on the investment ?

 

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Accounting Basics: What is the after-tax net cash inflow on the investment
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