After Tax Incremental Cash Flow

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• Incremental after-tax cash flows

  cash flow (87,800) 11,920 29,160 26,456 23,500 29,764 The solution explains how to calculate the incremental after-tax cash flows

• Jim Bo's currently has annual cash revenues of $240,000 and annual operating expenses of $185,000 including $35,000 in depreciation. The firm's marginal tax rate is 40 percent. A new cutting machine can be purchased for $120,000 that will increase revenues by $50,000 per year while operating expenses would increase to $205,000, including $42,000 in depreciation. Compute Jim Bo's annual incremental after-tax net cash flows.

  Compute Jim Bo's annual incremental after-tax net cash flows.

• Capital Budgeting - Estimating Cash Flow

  : Incremental Depreciation 0.5 Incremental Operating Earnings Before Tax 10.5 Less: Tax 4.2 Incremental Operating Earnings After Tax 6.3 Incremental Depreciation 0.5 Incremental After Tax Cash Flows 6.8 (Source: Weaver & Weston, 2001).

• After Tax Cash Flows

  GRAHAM SCHOOL: CORPORATE FINANCE Page The after tax cash flows are calculated as After tax cash flow = After tax incremental cash flows + depreciation tax shield.

• Calculating cash flows, after-tax salvage value, NPV and IRR

  Calculate the after-tax salvage cash flow.

• Incremental Cash Flow and NPV

  38200 Incremental Cash Flow and NPV ABC Manufacturing - Incremental Cash Flow and NPV ABC Manufacturing is thinking of launching a new product.

• Lease vs Buy

  tax rate= 35% Year 1-7 cash flow lease payments= $130,000 tax shield on lease payment= tax rate x lease payment= $45,500 =0.35 x 130000 After tax cash flow due to leasing= $84,500 =$130,000 - $45,500

• Capital budgeting-Replacement Project Analysis

  cash inflows from new asset - Operating cash inflows from old asset Terminal Cash flow= After tax cash flows from termination of new asset + Recovery of working capital requirements - After tax cash flow from termination of old asset "

• Incremental analysis: After tax profits with changed sales

  After-tax profit select (decreased or increased) by $__________ million. Cash flow select (decreased or increased) by $___________ million. b.