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A $ 1 2 0 , 0 0 0 machine with a 1 2 - year class life was purchased 2 years ago and has

A $120,000 machine with a 12-year class life was purchased 2 years ago and has a current salvage value of $90,000. The machine will now be replaced with a new machine costing $100,000, with a 10-year class life. The new machine will not increase sales but will decrease operating costs by $18,000 per year. Simplified straight line depreciation is employed for both machines, and the marginal corporate tax rate is 21 percent. 9. What is the initial outlay for the project?a) $3,950b) $7,900c) $100,000d) $92,100e) $2,10010. What is the incremental annual cash flow associated with the project in year 1?a) $11,060 b) $3,780 c) $14,220 d) $22,755e) $18,000

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