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Accounting question help! 2. The Katrina Corp is considering the purchase of a new machine that produces hurricane proof windows in January 2010. The window

Accounting question help!
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2. The Katrina Corp is considering the purchase of a new machine that produces hurricane proof windows in January 2010. The window machine will cost $300,000 and Katrina's management expects it to last 6 years. At the end of six years the new machine is expected to have a zero book value but could be sold for $25,000. Depreciation each year on the window machine will be $50,000 and Katrina's tax rate is 30%. The Pretax cash flows expected from the machine are as follows: Year Pre Tax Cash Flows 2010 $105,000 2011 96,000 2012 97,000 2013 85.000 2014 53,000 I 2015 (3,000) Required: (A.) Calculate the net present of the new machine if the cost of capital is 15%. (B.) Indicate whether or not Katrina should buy the new machine. (25 points)

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