Acme Corporation is considering the purchase of new machinery that costs $5 million and will be...
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Acme Corporation is considering the purchase of new machinery that costs $5 million and will be depreciated straight-line to $500,000 over 5 years. The machinery will cause Acme to increase sales by $6 million per year and operating costs (excluding depreciation) to increase by $4 million per year. The corporate tax rate is 25%. What is the impact on its annual operating cash flow? Acme Corporation is considering the purchase of new machinery that costs $5 million and will be depreciated straight-line to $500,000 over 5 years. The machinery will cause Acme to increase sales by $6 million per year and operating costs (excluding depreciation) to increase by $4 million per year. The corporate tax rate is 25%. What is the impact on its annual operating cash flow?
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To calculate the impact on annual operating cash flow we need to consider the increase in sales the ... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Posted Date:
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