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Splash Ltd plans to replace equipment which will result in additional revenues of $90,000 but will also increase costs by $40,000 per annum. Splash...

Splash Ltd plans to replace equipment which will result in additional revenues of $90,000 but will also increase costs by $40,000 per annum. Splash is able to claim additional depreciation of $30,000. What will its after‐tax cash flow be if the company tax rate, Tc is 30%?

a) $54,400

b) $44,000

c) $40,004

d) None of the above

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