Robin Company is considering the purchase of a new $80,000 delivery van. The van will have a useful life of 5 years, no terminal salvage value, and tax depreciation will be calculated using the straight- line method. If the van is purchased, the company will be able to increase annual revenues by $90,000 per year for the life of the van, but out- of- pocket expenses will also increase by $60,000 per year. Assume a tax rate of 40% and a required after- tax rate of return equal to 10%. The annual net after- tax cash effect of operations, exclusive of depreciation, is a(n):

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The Answer of Robin Company is considering the purchase of a new $80,000 delivery van. The van will have a useful life of 5 years, no terminal salvage value, and tax depreciation will be calculated using the straight- line method. If the van is purchased, the company will be able to increase annual revenues by $90,000 per year for the life of the van, but out- of- pocket expenses will also increase by $60,000 per year. Assume a tax rate of 40% and a required after- tax rate of return equal to 10%. The annual net after- tax cash effect of operations, exclusive of depreciation, is a(n):

Robin Company Is Considering the Purchase of a New $80,000