Local construction company had operating revenues

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Last year a local construction company had operating revenues of $1,240,000, operating costs of $520,000 and a CCA of $98,000 based upon existing assets. The beginning of that same year the company bought essential new equipment for $130,000. This equipment has a CCA rate of 30%. The company has borrowed money and is paying $18,000 per year in interest. Interest paid on borrowed money is tax deductible, so it reduces the taxable income. The tax rate is 37.62%.

After tax cash flow is close to

$501,220

$493,340

$507,450

$500,110

Reference no: EM131347588

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