Question
Normrac Corp is considering a five- year project to improve its production efficiency. Buying a new machine press for $325,000 is estimated to result in
Normrac Corp is considering a five- year project to improve its production efficiency. Buying a new machine press for $325,000 is estimated to result in $120,000 in annual pre-tax cost savings. The press falls into Class 8 for CCA purposes (CCA rate of 20% per year), and it will have a salvage value at the end of the project of $49,000. The press also requires an initial investment in spare parts inventory of $22,000, along with an additional $3,100 in inventory for each succeeding year of the projects. If the companys tax rate is 45% and its discount rate is 8%, should it buy and install the machine press? (1pts) Show your work (8 pts) and explain why (1pts)
You must solve the question in Excel and submit your Original Excel file showing formulas. Failure to do so will result in 0.
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