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Intro BKM Industries spent $10,000 on a feasibility study to expand its production capacity. The company decided to go ahead with the expansion: It will
Intro BKM Industries spent $10,000 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 $55,000 and spend $8,000 on installing it. The machine will be depreciated linearly to zero over a 5 -year period and it will have no salvage value. The machine will create $73,000 in incremental revenues per year and $51,100 in incremental costs per year. The company's marginal tax rate is 34%. Part 1 Attempt 3/10 for 10 pts. What is the incremental incremental cash flow associated with the expansion in year 0 (initial investment)? Part 2 Attempt 1/10 for 10 pts. What is the incremental incremental cash flow associated with the expansion in year 1
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