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Question
Propell Inc. is considering the purchase of a new machine that will cost $178,000, plus an additional $12,000 to ship and install. The new machine will have a 5-year useful life and will be depreciated using the straight-line method. The machine is expected to generate new sales of $85,000 per year and is expected to increase operating costs by $10,000 annually. Propell's income tax rate is 40%. What is the projected incremental cash flow of the machine for year 1?A) $54,800
B) $60,200
C) $66,350
D) $68,200
Answer
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