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

Jared Kidd is considering whether to invest in a computer game machine that he would place in a hotel his brother owns. The machine would cost $17,000 and has an expected useful life of three years and a salvage value of $2,000. Mr. Kidd estimates the machine would generate revenue of $8,000 per year and cost $1,500 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. Kidd expect for the first year if he invests in the machine?

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