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compute the initial investment QUESTION 28 5 points Saved Table 11.4 Degnan Dance Company, Inc., a manufacturer of dance and exercise apparel, is considering replacing
compute the initial investment
QUESTION 28 5 points Saved Table 11.4 Degnan Dance Company, Inc., a manufacturer of dance and exercise apparel, is considering replacing an existing piece of equipment with a more sophisticated machine. The following information is given. Facts Existing Machine Proposed Machine Cost - $100,000 Cost-$150,000 Purchased 2 years ago Installation - $20,000 Depreciation using MACRS over Deprecation-the MACRS a 5-year recover schedule 5-year recovery schedule will be used Current market value = $105,000 Five year usable life remaining Five year usable life expected Earning before Depreciation and Taxes Editing Machine Proposed Machine Year 1 $160,000 Year 1 $170.000 150,000 2 170,000 3 140,000 3 170,000 4 140,000 4 170,000 5 140,000 5 170,000 2 The firm pays 40 percent taxes on ordinary income and capital gains. Given the information in Table 11.4, compute the initial investment. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac) Step by Step Solution
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