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Brewer Vending Machine Company plans to replace 1 0 of its vending machines with newer models. The current machines were purchased three years ago for
Brewer Vending Machine Company plans to replace of its vending machines with newer models. The current machines were purchased three years ago for $ each and are being depreciated straightline to a salvage value of $ five years from now. The machines collectively generate annual revenue of $ and annual expenses of $ The newer machines can be purchased for $ each and would be depreciated straightline to a salvage value of $ five years from now. The new machine would generate annual sales of $ because of less downtime than the old machines and the annual expenses of $smaller repair bills than the old machines If Brewer's marginal tax rate is what will be the incremental change in its annual cash flow if the old machines are replaced? What will be the free cash flow each period from to Your spreadsheet should look like the following with some, or all of the items listed below.
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