1 2 3 In year four Smith LLC had EBIT of 100 Taxes were Sele

In year four. Smith LLC had EBIT of 100, Taxes were Select one: O a. 75 o b. 85 30% and depreciation was 15, Cash flow in year four was c. 95 o d. 105

Cashflow = EBIT - Tax + Depreciation = 100 - 30 + 15 = $ 85 Option B

Option B

$ 1,00,000 x 6% PV for 6 years = 100000 * .7050 = $ 70500

Net present value at 12% = Annual Cash Flows x PVIFA _{12%, n=3} - Initial Investment = $ 200,000 x 2.4018 - $ 300,000 = $ 180,360

Answer is Option B

1. 2. 3. In year four. Smith LLC had EBIT of 100, Taxes were Select one: O a. 75 o b. 85 30% and depreciation was 15, Cash flow in year four was c. 95 o d. 105

1 2 3 In year four Smith LLC had EBIT of 100 Taxes were Sele

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