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Mystic Beverage Company is considering purchasing a new bottling machine. The new machine costs $120,717, plus installation fees of $18,795 and will generate earning before
Mystic Beverage Company is considering purchasing a new bottling machine. The new machine costs $120,717, plus installation fees of $18,795 and will generate earning before interest and taxes of $95,398 per year over its 7-year life. The machine will be depreciated on a straight-line basis over its 7-year life to an estimated salvage value of 0. Mystics marginal tax rate is 0%. Mystic will require $36,590 in NWC if the machine is purchased. Determine the annual cash flow in year 3 if the machine is purchased. round your answer to two decimals
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