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Intro BKM Industries spent $ 1 0 , 0 0 0 on a feasibility study to expand its production capacity. The company decided to go
Intro
BKM Industries spent $ on a feasibility study to expand its production
capacity. The company decided to go ahead with the expansion: It will need to
buy a new machine for $ and spend $ on installing it The machine
will be depreciated linearly to zero over a year period and it will have no
salvage value.
The machine will create $ in incremental revenues per year and $ in
incremental costs per year. The company's marginal tax rate is
Part
What is the incremental incremental cash flow associated with the expansion in
year initial investment
Part
What is the incremental incremental cash flow associated with the expansion in
year
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