Company L sold an inventory item to Firm M for $40,000. Company L’s marginal tax rate is 21 percent. In each of the following cases.

Required:

Compute Company L’s after-tax cash flow from the sale when Firm M’s payment consisted of $10,000 cash and its note for $30,000. The note is payable two years from the date of sale. Company L’s basis in the inventory item was $15,700.