Determine the after-tax cash flow for each year

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An automatic copier is being considered that will cost $8,000, have a life of four years, and no prospective salvage value at the end of that time. It is estimated that because of this venture, there will be a yearly gross income of $8,000. The operating cost during the first year will be $2,000, increasing by $100 each year thereafter. The company contemplating the purchase of this asset has an effective tax rate of 50%. Determine the after-tax cash flow for each year. First use straight line depreciation, and then use double declining balance switching to straight line depreciation.

Reference no: EM131292247

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