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3. (40 points) An engineering company places a milling machine that costs $11.000 in operation today. It has expected useful life of 5 years and
3. (40 points) An engineering company places a milling machine that costs $11.000 in operation today. It has expected useful life of 5 years and $200 salvage value at the end of the period. (1) Compute the annual depreciation allowances and the resulting book value using the DDB and switching to SL. (2) If the company makes a profit of $2000 annually, at 31% tax rate, compute the after-tax cash flow. 3. (40 points) An engineering company places a milling machine that costs $11.000 in operation today. It has expected useful life of 5 years and $200 salvage value at the end of the period. (1) Compute the annual depreciation allowances and the resulting book value using the DDB and switching to SL. (2) If the company makes a profit of $2000 annually, at 31% tax rate, compute the after-tax cash flow
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