Equipment with s first cost of $10,000,000 is depreciated by MACRS over a 7-year recovery period. The estimated expenses are $3,000,000 each year annual revenues are $12,000,000.The effective tax rate is 40% and MARR is 12% per year.
a) Using the format discussed in class, prepare an income statement for just year 3.
b) What is the Present worth of the After-Tax Cash Flow for year 3?