Question - To open a new store, Linton Tire Company plans to invest $336,000 in equipment expected to have a six -year useful life and no salvage value. Linton expects the new store to generate annual cash revenues of $319,000 and to incur annual cash operating expenses of $187,000. Linton's average income tax rate is 40 percent. The company uses straight-line depreciation.
Required - Determine the expected annual net cash inflow / outflow for each of the first four years after Linton opens the new store.