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A machine is being considered for a purchase price, and basis, of $2 million; the machine would be depreciated straight-line to $100,000 salvage over 20
A machine is being considered for a purchase price, and basis, of $2 million; the machine would be depreciated straight-line to $100,000 salvage over 20 years. The machine is expected to create $125,000 in revenue a year. Utility costs are expected to be $15,000 a year and labor costs are expected to be $40,000 a year. The tax rate is 30%. [a] What is the Depreciation Rate? [b] What is the expected OCF for the first year? [a] $95,000; [b] $70,500 O [a] $100,000; [b] $77,500 [a] $95,000; [b] $77,500
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