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ABC welding machine has 6 years of remaining life. If kept the machine will have depreciation expenses of $700 each year. If the current book

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ABC welding machine has 6 years of remaining life. If kept the machine will have depreciation expenses of $700 each year. If the current book value is $4,200, and it can be sold for $3,500 at this time. If the old machine is not replaced. it can be sold for $800 at the end of its useful life. ABC is considering purchasing a new machine, which costs $13.200 and has an estimated useful life of 6 years with an estimated salvage value of $2500. This machine falls into the MACRS 5-year class, so the applicable depreciation rates are 20%, 32%, 19%, 129, 11%, and 6%. The new machine would raise sales by $2.000 per year the new machine would increase operating expenses by $500 per year. To support the greater sales, the new machine would require $2,100 additional investment NWC. ABC's tax rate is 25% and its WACC IS 10%. What is the amount of cash flow in year o (initial cash flow? $13,325 B $14,425 -S11,625 $11.9755 5.57,425

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