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Mr. Primo Uno is considering to purchase a machine worth P80,000. The estimated useful of 5 years with no residual value. It is expected to generate a net income before taxes of P40,000 a year with income tax rate of 30%. What is the annual cash return? 28,000 44,000 56,000 None of the above

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Computation of Annual Cash Return:
Particulars Amount  
Net Income before Taxes 40,000  
Less: Taxes @30% 12000  =40000*30%
Net Income after Taxes 28,000  
Add: Depreciation 16000  =80000/5
Annual Cash Return 44,000  

So, the correct option is 2nd "44,000".

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