Question
A machine costs $100,000 and generates $25,000 of pre-tax operating income per year. The tax rate is 40%. The machine is in a CCA class
A machine costs $100,000 and generates $25,000 of pre-tax operating income per year. The tax rate is 40%. The machine is in a CCA class with a 20% rate. The cost of capital is 12%. The machine is expected to last 10 years and will have no salvage value. Other assets will remain in the asset class.
What is the NPV of the machine?
Detailed explanation plz
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Production And Operations Analytics
Authors: Steven Nahmias, Tava Lennon Olsen
8th Edition
1478639261, 9781478639268
