| 2. Onorato Corporation has provided the following information concerning a capital budgeting project: ![\"061952_4-50.jpg\"](\"//my.pennfoster.com/exams/images/061952_4-50.jpg\"/)
The company uses straight-line depreciation on all equipment. How much is the total cash flow net of income taxes in year 2?
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| A. $160,000 | | B. $90,000 | | C. $98,000 | | D. $133,000 | |
Annual sales 600000 Annual cash operating expenses 440000 Annual net cash flows 160000 Less: Depreciation expense 70000 =280000/4 Income before tax 90000 Less: Income tax 27000 =90000*30% Net income 63000 Add: Depreciation expense 70000 Total cash flow net of income taxes 133000 Option D is correct
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