Question
A manufacturing company has purchased a new machine for $400,000 with a lifetime of 10-years. The increased net income due to this machine is $90,000.
A manufacturing company has purchased a new machine for $400,000 with a lifetime of 10-years. The increased net income due to this machine is $90,000. The companys tax rate is 40% and after-tax MARR is 12%. The company is planning to use the machine for 8 years and then sell it for $30,000. Develop tables using a spreadsheet to determine the after-tax cash flow for each year from 1 through 8. Calculate the after-tax PW and ERR after 8 years to determine whether this investment is profitable. Use MACRS- GDS depreciation for a 10-year property. Attach a screenshot of your spreadsheet for receiving credits.
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