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Marizza181 [45]
3 years ago
8

The Venoid Corporation has an annual cash inflow from operations from its investment in a capital asset of​ $23,000 (excluding​

depreciation) each year for five years. The​ corporation's income tax rate is​ 30%. Calculate the total afterminustax cash inflow from operations for five years.
Business
1 answer:
statuscvo [17]3 years ago
3 0

Answer:

$80,500

Explanation:

Data provided as per the question

Capital asset = $23,000

Number of year = 5

Income tax rate = 30%

The computation of cash inflow from operations is as shown below:-

Before tax  = capital asset × number of year

= $23,000 × 5

= $115,000

Cash inflow from operations = Before tax × (1 - Income tax rate)

= $115,000 × (1 - 0.3)

= $115,000 × 0.7

= $80,500

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\left[\begin{array}{cccc}&Continued&Discontinued&Differential\\Sales&1,200,000&0&-1,200,000\\Variable&-640,000&0&640,000\\Allocate cost&-620,000&-620,000&0\\Result&-60,000&-620,000&-560,000\\\end{array}\right]

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