Question
Dorothy & George Company is planning to acquire a new machine at a total cost of $64,800. The machines estimated life is six years and
Dorothy & George Company is planning to acquire a new machine at a total cost of $64,800. The machines estimated life is six years and its estimated salvage value is $600. The company estimates that annual cash savings from using this machine will be $12,100. The companys after-tax cost of capital is 8% and its income tax rate is 40%. The company uses straight-line depreciation
What is this investments net after-tax annual cash inflow? | |
Assume that the net after-tax annual cash inflow of this investment is $9,000; what is the net present value (NPV) of this investment? |
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