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Athough the Chen Company's misling machine is old, it is still in relatively good working order and would last for another 10 , years: it
Athough the Chen Company's misling machine is old, it is still in relatively good working order and would last for another 10 , years: it is inefficient compared to modern standards, though, and so the company is considering replacing it. The new malling machine, at a cost of $120,000 delivered and installed, would also last for 10 years and would produce after-tax cash flows (labor savings and depreciation tax savias) of $19,800 per year. It would have zero salvage value at the end of its life. The project cost of capital is 10%, and its marginal tax rate is 25%. Should Chen buy the new machine? Do not round intermediate calcutations. Round youn answer to the hearest cent. Negative value, if any, should be indicated by a minus sign. NDY: 8 Chen (sesect- a purchase the new machine
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