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What is the after-tax cash flow

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Question - Your Company uses recycled newspaper to make paper towels and is considering buying a machine that utilizes a proprietary de-inking technology that will reduce the cost of de-inking the recycled newspaper. The company can buy the machine for $300,000 and it is expected to have a five year life. In order to use the de-inking machine, the company has to train multiple employees how to use the machine appropriately. The cost of training is $10,000. Assume for simplicity that both of these components of the initial investment occur at Year 0 and that the company is otherwise very profitable and faces a 40% tax rate.

What is the after-tax cash flow associated with the initial investment in the project in Year 0?

Reference no: EM132558155

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