What would be the after-tax cash flow in year 1

Reference no: EM133472303

Question: Company C has a 21 percent marginal tax rate and buys equipment for $ 100,000 during August 2022 (year 1). The bonus depreciation rate is 50%. The equipment is half-financed with debt (half paid in cash in 2022). Company C can defer payment until year 4 and pay $ 11,500 in interest expense each year (year 1 through year 4). What would be the after-tax cash flow in year 1.

Reference no: EM133472303

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