Solution-What the income tax expense in year three

What the income tax expense in year three

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Reference no: EM132927882

Question - The following information relates to a company's capital budgeting project:

After-tax discount rate 9%

Tax rate 30%

Expected life of the project 4 Investment required in equipment $176,000

Salvage value of equipment $0

Annual sales $500,000

Annual cash operating expenses $364,000

One-time renovation expense in year 3 $68,000

The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.

Required - What the income tax expense in year 3?

Reference no: EM132927882

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What the income tax expense in year three

Reference no: EM132927882

Reference no: EM132927882

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