Solution-What are annual cash flows from operations

What are annual cash flows from operations

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Reference no: EM132548827

Answer the following questions using the information below:

Gavin Inc. is in need of a computer network for their staff. They receive a proposal as below :

Proposal Initial after-tax investment in equipment$102,000

Annual cash increase in operations:

Year 1 (before-tax) 60,000

Year 2 (before-tax) 60,000

Year 3 (before-tax) 60,000

Terminal disposal value 0

Estimated life 3 years

The company uses straight-line depreciation for all capital assets. Required rate of return= 14%; tax rate = 30%.

Question 1: What are Annual Cash Flows from Operations and Net Present Value (NPV)?

Reference no: EM132548827

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What are annual cash flows from operations

Reference no: EM132548827

Reference no: EM132548827

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