Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company is considering a 5-year project to expand production with the purchase of a new automated machine using the latest technology. The new machine

A company is considering a 5-year project to expand production with the purchase of a new automated machine using the latest technology. The new machine would cost $200,000 FOB St. Louis, with a shipping cost of $7,000 to the plant location. Installation expenses of $9,000 would also be required. This new machine would be classified as 7-year property for MACRS depreciation purposes. The project engineers anticipate that this equipment could be sold for salvage for $43,000 at the end of the project. If the corporate tax rate is 33%, what is the after tax salvage cash flow for this new machine at the end of the project? (Answer to the nearest dollar.) MACRS percentages for depreciation each year are as follows: Year % 1 14.29 2 24.49 3 17.49 4 12.49 5 8.93 6 8.93 7 8.93 8 4.45

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Intelligence For HR Professionals

Authors: Karen Berman, Joe Knight, John Case

1st Edition

1422119130, 978-1422119136

More Books

Students also viewed these Finance questions

Question

Describe the appropriate use of supplementary parts of a letter.

Answered: 1 week ago