Homework Answers
Depreciation = Invested Amount / Useful life years = $61,000,000 / 10 = $6,100,000
After-tax cash flow for year 9 = [(Sales - Operating & maintenance costs) * (1 - t)] + [Depreciation * t]
= [($41,000,000 - $29,000,000) * (1 - 0.36)] + [$6,100,000 * 0.36]
= [$12,000,000 * 0.64] + $2,196,000
= $7,680,000 + $2,196,000 = $9,876,000
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