Question 15. Question: Carmino Company is considering an investment in equipment that
will generate an after-tax income of $ 6,000 for each year of its four-year life. The asset has no salvage value. The firm is in the 40 % tax bracket. The net book value( NBV) of the investment at the beginning of each year will be as follows: Year 1 = $ 30,000 Year 2 = 15,000 Year 3 = 7,500 Year 4 = 3,750 The amount of after-tax cash inflow from the asset in Year 3 is: Student Answer: $ 6,600. $ 7,500.
Question 15. Question: Carmino Company is considering an investment in equipment that
will generate an after-tax income of $ 6,000 for each year of its four-year life. The asset has no salvage value. The firm is in the 40 % tax bracket. The net book value( NBV) of the investment at the beginning of each year will be as follows: Year 1 = $ 30,000 Year 2 = 15,000 Year 3 = 7,500 Year 4 = 3,750 The amount of after-tax cash inflow from the asset in Year 3 is: Student Answer: $ 6,600. $ 7,500.