Clinton Corp bought a machine from Sanders Inc. The machine generates a before tax cash flow of $5,000 per year over the next ten years. Assume the machine was bought for $20,000 and is depreciated straight line (10 years) with no salvage value. What is Clinton Corp’s after tax cash flow on the machine in year 3 if their tax rate is 40%? Show your work please. A. $1,200 B. $2,800 C. $3,000 D. $3,800
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Clinton Corp bought a machine from Sanders Inc. The machine generates a before tax cash flow of $5,000 per year over the next ten years.
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