You wish to analyze the financial effects after taxation of purchasing a set of desks, chairs and file cabinets (office furniture). The cost of the equipment is 10,000. It is to be depreciated using the government mandated MACRS schedule furnished with the tables in this exam. The new equipment is expected to generate 5000 dollars each year for the first three years and then 8000 per year for 20 years after that. The tax rate is 35%. The analysis will be considered to give a yearly specification of BEFORE TAX CASH FLOW, DEPRECTIATION, TAXABLE INCOME, TAXES and AFTER TAX CASH FLOW. The easiest display technique would be a spread sheet. Carry out the analysis for the first 8 years only.

Answer rating: 100% (QA)

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