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a) A machine can be purchased and installed for $90,000. It is believed that $10,000 can be [10] obtained when the machine is disposed of
a) A machine can be purchased and installed for $90,000. It is believed that $10,000 can be [10] obtained when the machine is disposed of at the end of year eight. The net annual value added (i.e., revenues less expenses) that can be attributed to this machine is constant over eight years and amounts to $15,000. An effective income tax rate of t% is used by the company, and the after-tax MARR equals 15% per year. Using the tax rate as the last two digits of your student ID number, compute the following: a. What is the approximate value of the company's before-tax MARR? b. Determine the 200% DB depreciation amounts in years one through eight. c. What is the taxable income at the end of year eight that is related to capital investment? d. Set up a table and calculate the ATCF for this machine. e. Should a recommendation be made to purchase the machine? (Example: If the student of a student is 100207044, then the tax rate (t%) is 44%)
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