Find annual estimated net income and net cash inflow

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Diane Manufacturing Company is considering investing $500,000 in new equipment with an estimated useful life of 10 years and no salvage value. The equipment is expected to produce $320,000 in cash inflows and $200,000 in cash outflows annually. The company uses straight-line depreciation, and has a 30% tax rate.

Problem 1: Determine the annual estimated net income and net cash inflow.

                       Accrual         Cash Flow
Cash Inflows 320,000         320,000
Cash Outflows (200,000)      (200,000)

 

Reference no: EM132775862

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