Multiple Choice
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Homer Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $164,800. The equipment will have an initial cost of $515,000 and have a 5-year
life. If the salvage value of the equipment is estimated to be $11,000, what is the annual net cash flow?
Multiple Choice
$153,800
$64,000
$265,600
$175,800
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