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Managerial Acct

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Schafer Company is considering an investment in equipment costing $30,000 with a five-year life and no salvage value. Schafer uses straight-line depreciation and is subject to a 34 percent tax rate. The expected net cash inflow before depreciation and taxes is projected to be $15,000 per year. The year 1 annual net cash inflow is:
$5,940
$9,000
$11,940
$15,000

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This solution consist of Managerial Accounting.

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The answer is $11,940.

Answer:
Given,
Investment in equipment=$30,000
Depreciation ...

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  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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