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AOS Industries Statement of Cash Flows for 2008

Question 72

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AOS Industries Statement of Cash Flows for 2008
AOS Industries Statement of Cash Flows for 2008 Consider the above statement of cash flows. In 2008, AOS Industries had contemplated buying a new warehouse for $3 million, the cost of which would be depreciated over 10 years. If AOS Industries has a tax rate of 25%, what would be the impact for the amount of cash held by AOS at the end of the 2008? A) It would have $3,000,000 less cash at the end of 2008. B) It would have $2,925,000 less cash at the end of 2008. C) It would have $1,500,000 less cash at the end of 2008. D) It would have an additional $7,500,000 in cash at the end of 2008.
Consider the above statement of cash flows. In 2008, AOS Industries had contemplated buying a new warehouse for $3 million, the cost of which would be depreciated over 10 years. If AOS Industries has a tax rate of 25%, what would be the impact for the amount of cash held by AOS at the end of the 2008?


A) It would have $3,000,000 less cash at the end of 2008.
B) It would have $2,925,000 less cash at the end of 2008.
C) It would have $1,500,000 less cash at the end of 2008.
D) It would have an additional $7,500,000 in cash at the end of 2008.

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