Bertram Corporation is considering an investment in equipment for $150,000.
Data related to the investment are as follows:
Cost of capital is 10 percent.
Bertram uses the straight-line method of depreciation with mid-year convention for tax purposes. In addition, its tax rate is 40 percent and the depreciable life of the equipment is four years with no salvage value. The equipment is sold at the end of the fifth year.
Required:
Determine the following amounts using after-tax cash flows:

Question

Bertram Corporation is considering an investment in equipment for $150,000.
Data related to the investment are as follows:
  Cost of capital is 10 percent.
Bertram uses the straight-line method of depreciation with mid-year convention for tax purposes. In addition, its tax rate is 40 percent and the depreciable life of the equipment is four years with no salvage value. The equipment is sold at the end of the fifth year.
Required:
Determine the following amounts using after-tax cash flows:

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The Answer of Bertram Corporation is considering an investment in equipment for $150,000.
Data related to the investment are as follows:
  Cost of capital is 10 percent.
Bertram uses the straight-line method of depreciation with mid-year convention for tax purposes. In addition, its tax rate is 40 percent and the depreciable life of the equipment is four years with no salvage value. The equipment is sold at the end of the fifth year.
Required:
Determine the following amounts using after-tax cash flows:

Bertram Corporation Is Considering an Investment in Equipment for $150,000