Hayes, Inc. is considering buying a large piece of equipment for $80,000. Hayes expects that the equipment will last for ten years and then be worthless. During its life, Hayes predicts the equipment will earn $12,000 per year net income before taxes. Hayes is in the 21% tax bracket. What is the expected AFTER-TAX cash flow on this piece of equipment?

Hayes, Inc. is considering buying a large piece of equipment for $80,000. Hayes expects that the equipment will last for ten years and then be worthless. During its life, Hayes predicts the equipment will earn $12,000 per year net income before taxes. Hayes is in the 21% tax bracket. What is the expected AFTER-TAX cash flow on this piece of equipment?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 2P

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