LISP Inc Is Planning to Purchase a New Mixer for $50,000

Multiple Choice

LISP Inc. is planning to purchase a new mixer for $50,000 that will qualify as MACRS 3-year property (first-year depreciation rate = 33.33%) . The new mixer should increase revenues by $20,000 per year, with no increase in operating cost. If LISP's marginal tax rate is 40 percent, what is the net cash flow in the first year?

A) $22,665
B) $19,000
C) $18,666
D) $21,500