Tax incentives and capital budgeting Hoble Company is evaluating the acquisition of a machine that costs $90,000

Question:

Tax incentives and capital budgeting Hoble Company is evaluating the acquisition of a machine that costs $90,000 and is expected to last 5 years with no salvage value. Operating revenues and expenses each year are expected to be $94,000 and $63,000 respectively, not includ- ing MACRS depreciation expense. The machine will be put into service at the beginning of 1992. The cost of capital is 18 percent and the combined state and federal income tax rate is 34 percent. image text in transcribed