Coache corporation is considering a capital budgeting project that would require an investment of $120,000 in equipment with a 4 year useful life and zero salvage value. the annual incremental sales would be $310,000 and the annual incremental cash operating expenses would be $230,000. in addition, there would be a one-time renovation expense in year 3 of $30,000. the company's income tax rate is 30%. the company uses straight-line depreciation on all equipment. the total cash flow net of income taxes in year 3 is:

a. $44,000
b. $35,000
c. $65,000
d. $50,000

a. $44,000

Explanation:

The computation of the total cash flow net of income taxes in year 3 is shown below:

= Incremental sales - annual incremental cash operating expenses - one-time renovation expense - depreciation expense - income tax expense + depreciation expense

= $310,000 - $230,000 - $30,000 - $30,000 - $6,000 + $30,000

= $44,000

Since depreciation is a non-cash expense so it would be added back to the computation part

The depreciation expense would be

= (Original cost - residual value) ÷ (useful life)

= ($120,000 - $0) ÷ (4 years)

= ($120,000) ÷ (4 years)  

= $30,000

And, the income tax expense would be

= (Incremental sales - annual incremental cash operating expenses - one-time renovation expense - depreciation expense) × tax rate

= ($310,000 - $230,000 - $30,000 - $30,000) × 30%

= $20,000  × 30%

= $6,000

i believe the answer is: streets and roads

public property refers to the property that can be used by all legal citizens in a certain country. the public property was created and maintain using the government budget that allocated specifically for it. the budget itself come from the citizen's income tax payment.

i'ts proportional. if the inflation rate is 12% for example, the cpi will be 12% less.

hope it ,

bioteacher101