Question

To open a new store, Linton Tire Company plans to invest $360,000 in equipment expected to have a four-year useful life and no salvage value. Linton expects the new store to generate annual cash revenues of $400,000 and to incur annual cash operating expenses of $210,000. Linton’s average income tax rate is 30 percent. The company uses straight-line depreciation.

Required
Determine the expected annual net cash inflow from operations for each of the first four years after Linton opens the new store.



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  • CreatedFebruary 07, 2014
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