Question 9

For this question start fresh, do not carry over data from earlier questions. You are analyzing the prospects of installing cost saving machinery. You have the following information: On a yearly basis the machinery generated a savings of $34,000 which led to an increase in taxes of $5,600. The space used by the machinery was lost, leading to loss of rent (post tax) of $8,000. (Hint: Here you don't need to know Depreciation (which is needed for calculating taxes) or the tax rate. You are told what the taxes are. ) What will be the net increase in cash flows per year from installing the machinery?