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If the machine produces annual units of 1,500 units. Each unit has sale price of $200 per unit and cost of $120 per unit. Sale
If the machine produces annual units of 1,500 units. Each unit has sale price of $200 per unit and cost of $120 per unit. Sale price and cost will increase 5% per year. Given the machine is bought at $260,000 with shipping cost of $10,000 and installation cost of $30,000. The machine has economic life of 4 years. The tax rate is 25%. NWC (t)=15%*Sale (t+1) (1). What would be FCF at year 2? (2). What would be tax expense if the machine will be sold at year 3 at $40,000? Year MACRS 1 2 33% 45% 15% 7%
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