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ACCT 434 Problem 21-28 - After-tax cash flow from terminal...

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Problem 21-28 Initial Investment ($46,900,000) Annual After-Tax Cash Flow Dec. 31, 2001 $6,901,104 Annual After-Tax Cash Flow Dec. 31, 2002 $6,828,696 Annual After-Tax Cash Flow Dec. 31, 2003 $6,698,496 Annual After-Tax Cash Flow Dec. 31, 2004 $6,517,728 Annual After-Tax Cash Flow Dec. 31, 2005 $6,286,896 Annual After-Tax Cash Flow Dec. 31, 2006 $6,047,496 Annual After-Tax Cash Flow Dec. 31, 2007 $5,771,136 Income tax cash savings from annual depreciation deductions $9,584,400
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Unformatted text preview: After-tax cash flow from terminal sale of equipment $3,796,800 Net Present Value $11,532,752 Superfast would prefer to: a. have lower tax rates, b. have revenue exempt from taxation, c. recognize taxable revenues in later years rather than earlier years, d. recognize taxable cost deductions greater than actual outlay costs, and e. recognize cost deductions in earlier years rather than later years...
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