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Identifying Cash Flows . . . . Cost to purchase machine $40,000 Cost to install machine 1,000 Cost of new electric wiring 2,000 First-year depreciation
Identifying Cash Flows
. . . . Cost to purchase machine $40,000 Cost to install machine 1,000 Cost of new electric wiring 2,000 First-year depreciation of machine 4,000 Sales tax on purchasing machine 3,000 Economic salvage value of the machine 10,000 Accounting salvage value of the machine 8,000 2a. Which of the above figures should enter the capital budgeting analysis? (2 points) 2b. What figure should enter the capital budgeting analysis as the investment at year zero? (2 points) 2c. Which of the above figures should not enter the capital budgeting analysis? (2 points) Step by Step Solution
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