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For this question start fresh, do not carry over data from earlier questions.

July 20, 2020/in Feeds /by admin

For this question start fresh, do not carry over data from earlier questions. You are analyzing the prospects of installing cost saving machinery. You have the following information:

On a yearly basis the machinery generated a savings of $40,000 which led to an increase in taxes of $4,800. The space used by the machinery was lost, leading to loss of rent (post tax) of $8,000.
(Hint: Here you don’t need to know Depreciation (which is needed for calculating taxes) or the tax rate. You are told what the taxes are. )
What will be the net increase in cash flows per year from installing the machinery?