Determine the next after tax cash inflows for new machine

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Reference no: EM132517117

Point 1: Hamlet company is considering the purchase of a new machine that would cost $300000 and would have an estimated useful life of 10 years with no salvage value. The new machine is expected to have annual before-tax cash inflows of 100000 and annual before tax cash outflows of 400000. The company will depreciate the machine using straight line depreciation, and the assumed tax rate is 40%.

Question 1: Determine the next after tax cash inflows for the new machine? Determine the payback period for the new machine?

Reference no: EM132517117

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