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Answer please Sandhill Manuacturing mansgement is comidering overhauling their existing line, which currently has both a book walue acd a savage value or $0, it
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Sandhill Manuacturing mansgement is comidering overhauling their existing line, which currently has both a book walue acd a savage value or $0, it would cost $230,000 to overhaul the existing line bet this experditure would extend its usoful life to five pears. The line weuld have a so salvage value at the end of five years. The overhaul outlay would be capitalized and denceciated using MACRS threeyeacschedule. The tax rate is 28 nercent, the opportunity cost of capital is 10 percent. The NPV of the new production line is \$439543, [Do not round discount factor. Round your intermediote calculaticas and final answer to the nearest dollar, e.g: 5,275. Enter negative amounts using either a negative sign preceding the aumber e.g. 45 or parentheses 5 - (45).) EXHIBIT 11.5 MACRS Depreciation Schedules by Allowable Recovery Period The MeACRS schedule lists the tax depreciatioe ratos that frrms uie for atsets placodinto service after the Tax Reform Act of 1986 Went into etfect. The table indicates the percentage of the cost of the asoet that can be deprociated in each year during the period that it is beinn used, Year 1 is the year in which the asset is first placed in to service. Question 15 of 30 Shoud Sundhill replace or renovate the existieg line? Sandhill shodld the exising ling Step by Step Solution
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