Question: Glen Todd is considering whether to invest in a computer game machine that he would place in a hotel his brother owns. The machine would

Glen Todd is considering whether to invest in a computer game machine that he would place in a hotel his brother owns. The machine would cost $34,000 and has an expected useful life of three years and a salvage value of $4,000. Mr. Todd estimates the machine would generate revenue of $16,000 per year and cost $3,000 per year to operate. He uses the straight-line method for depreciation. His income tax rate is 30 percent.

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What amount of net cash inflow from operations would Mr. Todd expect for the first year if he invests in the machine?

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