The Wet Corp. has an investment project that will produce cash flows of $20,000 per year for three years. Assume the only expense is depreciation on the asset purchased and this will be $5,000 per year. The company's tax rate is 34%. What is the cash flow from the project in year 1?

Answer 1

How much will Pauline pay in interest if she takes out a simple interest loan with a principal of $3,900 at 7.2% for three years?