Share
Explore BrainMass

Cash flows

Sussman Industries purchased drilling machine for $50000 and paid cash.
Sussman expects to use the machine for ten year after which it will have no value.
It will be depreciated straight-line over ten years.
Assume a marginal tax rate of 40%.
What are the cash flows associated with the machine.

a. At the time of the purchase?
b. In each of the following ten years?

Solution Preview

Sussman Industries purchased drilling machine for $50000 and paid cash.
Sussman expects to use the machine for ten year after which it will have no value.
It will be depreciated straight-line ...

Solution Summary

This solution assists in determining cash flows.

$2.19