Question
Auburn Concrete Inc. is considering the purchase of a new concrete mixer to replace an inefficient older model that is completely worn out. If purchased,
Auburn Concrete Inc. is considering the purchase of a new concrete mixer to replace an inefficient older model that is completely worn out. If purchased, the new machine will cost $90,000 and is expected to generate savings of $40,000 per year for five years at the end of which it will be sold for $30,000. The mixer will be depreciated to a zero salvage value over three years using the straight-line method. Develop a five-year cash flow estimate for the proposal. Auburn's marginal tax rate is 23%. Enter your answer in thousands. For example, an answer of $1 thousand should be entered as 1, not 1,000. Round your intermediate calculations and final answer to the nearest thousand dollars. Use a minus sign to indicate negative cash flows or decreases in cash, if required.
Year | Cash Flow ($000) |
0 | $ fill in the blank 1 Incorrect |
1 | $ fill in the blank 2 |
2 | $ fill in the blank 3 |
3 | $ fill in the blank 4 |
4 | $ fill in the blank 5 |
5 | $ fill in the blank 6 |
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