The manager at Home Manufacturing Center needs to compute the effect of cash operating flows on the net income tax after the investment of a new home repair and design machine.The operating cost inflows from investment in the machine equal $150,000 with a 40% tax rate that resulted in $60,000 income taxes,excluding the effect of depreciation.
Required
Compute the after-tax cash flow from operations.What is the company's net income tax and cash flow from operations if the manager claims an additional deprecation deduction of $50,000 at the 40% tax rate?

Question

Quizplus · Accepted Answer

E)[(0.40 × $150,000)] = $60,000;[($150,000 - $60,000)] = $90,000
[(.40 × $50,000)] = $20,000;[($90,000 + $20,000)] = $110,000

The Manager at Home Manufacturing Center Needs to Compute the Effect