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You are considering the incremental cashflows for project year one. As a result of your new project, You expect that sal...

You are considering the incremental cashflows for project year one. As a result of your new project, You expect that sales will increase $10000 in year one. Your operating expenses will increase by $3000 as a result of this project. Depreciation of equipment for this project will be $2000 in year one.

You also took out a loan to finance the new machine and you owe a $100 interest payment.  

The applicable tax rate is 25%.  

What is the new after tax income as a result of this project?

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Answer #1

What is the new after tax income as a result of this project

=(10000-3000-2000-100)*(1-25%)

=3675

the above is answer..

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