IMA CMA Part 2: Strategic Financial Management Exam CMA-Strategic-Financial-Management Question # 14 Topic 2 Discussion

IMA CMA Part 2: Strategic Financial Management Exam CMA-Strategic-Financial-Management Question # 14 Topic 2 Discussion

CMA-Strategic-Financial-Management Exam Topic 2 Question 14 Discussion:
Question #: 14
Topic #: 2

A company is considering investing £1 million for a new machine. The new machine is expected to generate £450,000 incremental before-tax operating cash inflows and £100.000 in additional depreciation expense for each of the next ten years. The company uses the same depreciation assumptions tor book and tax purposes. If the company's income tax rate is 30%, what is the change in the yearly after-tax cash flow from operations if the company invests in the new machine?


A.

£245,000


B.

£295, 000


C.

£315,000


D.

£345, 000


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