Problem:
The Wet Corp. has an investment project that will reduce expenses by $25,000 per year for three years. The project's cost is $55,000. If the asset is part of the three-year MACRS category (33% first year depreciation) and the company's tax rate is 34%,
Required:
What is the cash flow from the project in year 1?
A) $16,800
B) $15,100
C) $22,671
D) $16,667
Note: Please explain comprehensively and give step by step solution.