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June 18th, 2009, 05:19 PM  #1 
Newbie Joined: Jun 2009 Posts: 1 Thanks: 0  MACRS Cash Flow Question
I have been working on the following problem for some time and can not seem to come to a solide answer! I would appricate any help I can recieve on computing the right answer! Thank You So Much!!! The Wet Corp. has an investment project that will reduce expenses by $15,000 per year for 3 years. The project's cost is $20,000. If the asset is part of the 3year MACRS category (33% first year depreciation) and the company's tax rate is 34%, what is the cash flow from the project in year 1? How do you find the cash flow when the problem doesn't give you the earnings before deprication and taxes for the first year???? 
June 18th, 2009, 07:11 PM  #2 
Global Moderator Joined: Nov 2006 From: UTC 5 Posts: 16,046 Thanks: 938 Math Focus: Number theory, computational mathematics, combinatorics, FOM, symbolic logic, TCS, algorithms  Re: MACRS Cash Flow Question
Presumably you use the $15,000 less depreciation and taxes.


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