LISP Inc. is planning to purchase a new mixer for $50,000 that will qualify as MACRS 3-year property (first-year depreciation rate = 33.33%). The new mixer should increase revenues by $ 20,000 per year with no increase in operating costs. If LISP's marginal tax rate is 40 percent, what is the net cash flow in the first year?

Answer rating: 100% (QA)

1 Calculate the depreciation expense For MACRS 3year property with a firstyear depreciation rate of 3333 we can use the following depreciation schedul... View the full answer