Infante Corporation has provided the following information concerning a capital budgeting project:
The company uses straight-line depreciation on all equipment.
The total cash flow net of income taxes in year 2 is:
A) $76,000
B) $56,500
C) $90,000
D) $40,000

Question

Infante Corporation has provided the following information concerning a capital budgeting project:
 The company uses straight-line depreciation on all equipment.
The total cash flow net of income taxes in year 2 is:
A) $76,000 
B) $56,500 
C) $90,000 
D) $40,000

Quizplus · Accepted Answer

Depreciation expense = (Original cost - Salvage value) ÷ Useful life
= ($200,000 - $0) ÷ 4 years = $50,000 per year
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Infante Corporation Has Provided the Following Information Concerning a Capital