What will be cwc’s after-tax operating income

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Reference no: EM131394522

Canadian Wilderness Company (CWC) just bought a machine that is expected to generate $25,000 in operating income before depreciation expenses each year. The machine, which has a depreciable basis equal to $60,000, falls into the MACRS 3-year class. What will be CWC's

(a) after-tax operating income and

(b) operating cash flow for both this year (Year 1) and three years from now (Year 3)? Assume that all sales and operating expenses, except depreciation, are cash. CWC's marginal tax rate is 40 percent.

Reference no: EM131394522

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