After Tax WACC
Example - Sangria Corporation - continued
The company would like to invest in a perpetual crushing machine with
cash flows of $2.085 million per year pre-tax. Given an initial investment
of $12.5 million, what is the value of the machine?
Cash Flows
Pretax cash flow 2.085
Tax @ 35% 0.73
After-tax cash flow $1.355 millionCash Flows
Pretax cash flow 2.085
Tax @ 35% 0.73
After-tax cash flow $1.355 million