Tuesday 12 June 2012

Each year for eight years, an investment will generate incremental sales of $8,000 and cash

Each year for eight years, an investment will generate incremental sales of $8,000 and cash operating expenses of $2,500. The applicable tax rate is 30% and depreciation is $2,000. What is the net cash flows for each of the eight years?
a. $8,000
b. $6,500
c. $4,500
d. none of these

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