Multiple Choice
A project will increase annual sales by $60,000 and annual cash expenses by $51,000.The project will cost $40,000 and will be depreciated using straight-line depreciation to a zero book value over the 4-year life of the project.Ignore bonus depreciation.The company has a marginal tax rate of 23 percent.What is the annual operating cash flow using the tax shield approach?
A) $5,850
B) $8,650
C) $9,230
D) $9,770
E) $10,350
Correct Answer:
Verified
Correct Answer:
Verified
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