Question
Builtrite is considering purchasing a new machine that would cost $60,000 with an additional $6000 for installation. The machine would be depreciated (straight line) down
Builtrite is considering purchasing a new machine that would cost $60,000 with an additional $6000 for installation. The machine would be depreciated (straight line) down to $0 over its five year life and at the end of five years it is believed that the machine could be sold for $15,000. Currently, Builtrite is using a 5 year old maching that originally cost $30,000 and has 5 years of life remaining until it's $0 salvage value. If the old machine is sold now it's current salvage value is $20,000. The new machine would increase EBDT by $42,000 annually. Builtrites marginal tax rate is 34%. What the RATFCF associated with the purchase of this machine? $31,800 $31,188 $32,140 $30,780
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