What is estimated annual after-tax cash flow for year four

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Reference no: EM131176423

A company with a 34% marginal income tax rate is considering an investment that is classified as 3-year property in the MACRS depreciation schedule. The investment has the estimated following benefits:

Year Before tax cash-flow

0 $-75,000

1 $10,000

2 $25,000

3 $50,000

4 $15,000

a) What is the income tax owed in year 3?

b) What is the estimated annual after-tax cash flow for year 4?

Reference no: EM131176423

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