To open a new store, Linton Tire Company plans to invest $290,000 in...
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To open a new store, Linton Tire Company plans to invest $290,000 in equipment expected to have a five year useful life and no salvage value. Linton expects the new store to generate annual cash revenues of $316,000 and to incur annual cash operating expenses of $194,000. Linton's average income tax rate is 35 percent. The company uses straight-line depreciation Required Determine the expected annual net cash inflow/ outflow from operations for each of the first four years after Linton opens the new store. (Negative amounts should be indicated by a minus sign.) Answer is complete but not entirely correct. Inflow Outflow Net cash Year s $ 41,600Outflow Year 41,600 Infiow 2 Year 41,6 nflow 3 Year s 41,600 Inflow 4
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