What is the after-tax amount of annual cash operating savings associated with a proposed machine?

Question

Quizplus · Accepted Answer

The after-tax amount of annual cash operating savings is the operating savings times (1 minus the tax rate). This is because the operating savings are the pre-tax amount, and the tax liability needs to be considered to calculate the after-tax savings. Therefore, the correct formula is: After-tax savings = Operating savings x (1 - Tax rate)

What Is the After-Tax Amount of Annual Cash Operating Savings