Cash flow to differ from accounting income is depreciation

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Reference no: EM132046469

XYZ Company is considering a project that will increase the after-tax net accounting income 7 years from now by $4,729.38. (It also will have effects on other years' income as well; however, this question only addresses what happens 7 years from now.) The depreciation for this project 7 years from now will be $15,360. Assume a marginal tax rate of 40% and a required rate of return of 12.50%. If we assume that the only thing causing cash flow to differ from accounting income is depreciation, then what is the net cash inflow 7 years from now resulting from this project?

Reference no: EM132046469

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