Question

The profit for machine be was $200,000 including $60,000 in depreciation. The tax rate was 40%....

The profit for machine be was $200,000 including $60,000 in depreciation. The tax rate was 40%. What was the cash inflow including any tax savings?
$200,000
$284,000
$240,000
$140,000

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Answer #1

Correct answer is B.

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Cash inflow = 200000 + 60000 + 60000(1 - .4)

                     = 260000 + 24000

                     = 284000

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