(Appendix 8C)Pulkkinen Corporation has provided the following information concerning a capital budgeting project: The company uses straight-line depreciation on all equipment. The total cash flow net of income taxes in year 2 is:
A)$70, 000
B)$50, 000
C)$52, 500
D)$39, 500

Question

(Appendix 8C)Pulkkinen Corporation has provided the following information concerning a capital budgeting project:  The company uses straight-line depreciation on all equipment. The total cash flow net of income taxes in year 2 is:
A)$70, 000 
B)$50, 000 
C)$52, 500 
D)$39, 500

Quizplus · Accepted Answer

Depreciation expense = (Original cost - Salvage value)÷ Useful life
= ($80, 000 - $0)÷ 4 years = $20, 000 per year
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(Appendix 8C)Pulkkinen Corporation Has Provided the Following Information Concerning a Capital