Question
Builtrite is considering purchasing a new machine that would cost $75,000 and the machine would be depreciated (straight line) down to $0 over its five
Builtrite is considering purchasing a new machine that would cost $75,000 and the machine would be depreciated (straight line) down to $0 over its five year life. At the end of five years it is believed that the machine could be sold for $15,000. The current machine being used was purchased 2 years ago at a cost of $50,000 and it is being depreciated down to zero over its 5-year life. The current machine's salvage value now is $35,000. The new machine would increase EBDT by $54,000 annually. Builtrites marginal tax rate is 34%.
What the RATFCFs associated with the purchase of this machine?
Group of answer choices
$36,360
$37,340
$39,720
$43,660
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