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FAME Industries is a small business expanding its machining operations and plans to purchase 10CNC machines for a total of $1,300,000; this is considered MACRS
FAME Industries is a small business expanding its machining operations and plans to purchase 10CNC machines for a total of $1,300,000; this is considered MACRS 5-year property. The business estimates that these machines will generate an additional revenue of $235,000 per year; they plan to keep the machines for the next 8 years. At the end of 8 years, the CNC machines would have a salvage value of $155,000. The tax rate is 25%, the CNC machines are eligible for a Section 179 deduction, and FAME Industries uses an after-tax MARR of 9\%. Compute the PW and determine whether FAME Industries should invest in the CNC machines
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