Present worth of the after-tax cash flow for year three

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Reference no: EM131545764

Equipment with s first cost of $10,000,000 is depreciated by MACRS over a 7-year recovery period. The estimated expenses are $3,000,000 each year annual revenues are $12,000,000.The effective tax rate is 40% and MARR is 12% per year.

a) Using the format discussed in class, prepare an income statement for just year 3.

b) What is the Present worth of the After-Tax Cash Flow for year 3?

Reference no: EM131545764

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