Question

Alcon company is considering the purchase of a new assembly that will cost around $400,000. The same investment will reduce the company's cost by $150,000 each year. The tax rate is 35%. What would be the effect of the above transaction on the operating cash flows for year 2? a. Net operating cash would increase by $202,500 b. Net operating cash would increase by $205,200 c. Net operating cash would increase by $205,200 d. Net operating cash would decrease by $202,500​

Answer 1

Answer:

Net operating cash would decrease by $202,500