The Dickins Corporation is considering the acquisition of a new machine at a cost of $180, Transporting the machine to Dickins’ plant will cost $12, Installing the machine will cost an additional $18, It has a 10-year life and is expected to have a salvage value of $10, Furthermore, the machine is expected to produce 4,000 units per year with a selling price of $500 and combined direct materials and direct labor costs of $450 per unit. Federal tax regulations permit machines of this type to be depreciated using the straight-line method over 5 years with no estimated salvage value. Dickins has a marginal tax rate of 40%.What is the net cash flow for the tenth year of the project that Dickins should use in a capital budgeting analysis? What is the net cash flow for the tenth year of the project that Dickins should use in a capital budgeting analysis? A. $200,000 B. $158,000 C. $136,800 D. $126,000
The Dickins Corporation is considering the acquisition of a new machine at a cost of $180, Transporting the machine to Dickins’ plant will cost $12, Installing the machine will cost an additional $18, It has a 10-year life and is expected to have a salvage value of $10, Furthermore, the machine is expected to produce 4,000 units per year with a selling price of $500 and combined direct materials and direct labor costs of $450 per unit. Federal tax regulations permit machines of this type to be depreciated using the straight-line method over 5 years with no estimated salvage value. Dickins has a marginal tax rate of 40%.What is the net cash flow for the tenth year of the project that Dickins should use in a capital budgeting analysis? What is the net cash flow for the tenth year of the project that Dickins should use in a capital budgeting analysis?
A、 $200,000
B、 $158,000
C、 $136,800
D、 $126,000