Gayheart Corporation is considering a capital budgeting project that would require investing $80,000 in equipment with an expected life of 4 years and zero salvage value. The annual incremental sales would be $260,000 and the annual incremental cash operating expenses would be $190,000. The company's income tax rate is 30%. The company uses straight-line depreciation on all equipment. The total cash flow net of income taxes in year 2 is:
A)$50,000
B)$55,000
C)$70,000
D)$34,000

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The Answer of Gayheart Corporation is considering a capital budgeting project that would require investing $80,000 in equipment with an expected life of 4 years and zero salvage value. The annual incremental sales would be $260,000 and the annual incremental cash operating expenses would be $190,000. The company's income tax rate is 30%. The company uses straight-line depreciation on all equipment. The total cash flow net of income taxes in year 2 is:
A)$50,000
B)$55,000
C)$70,000
D)$34,000

Gayheart Corporation Is Considering a Capital Budgeting Project That Would