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What the Kimani incremental annual operating cash flow

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Reference no: EM133012069

Question - Kimani Company is considering the purchase of a new 400-ton stamping press. The press costs KShs. 360,000, and an additional KShs. 40,000 is needed to install it. The press will be depreciated straight-line to zero over a five-year life. The press will generate no additional revenues, but it will reduce cash operating expenses by KShs. 140,000 annually. The press will be sold for KShs. 120,000 after five years. An inventory investment of KShs. 60,000 is required during the life of the investment. Kimani is in the 40 percent tax bracket.

Required -

1. What the Kimani's incremental annual after-tax operating cash flow?

2. What is the Kimani net investment outlay?

3. What is the terminal year after-tax nonoperating cash flow at the end of year five?

Reference no: EM133012069

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