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$22,000.
$25,000.
UNIT 4 QUIZ
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.