Multiple Choice
Ruth Company has a tax rate of 40% and a required rate of return of 12%.The company has new equipment that saves $200,000 per year in labor costs.What is the annual after-tax cash flow from the labor cost savings?
A) $80,000 cash outflow
B) $80,000 cash inflow
C) $120,000 cash outflow
D) $120,000 cash inflow
Correct Answer:
Verified
Correct Answer:
Verified
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