Answered step by step
Verified Expert Solution
Question
1 Approved Answer
P5 plz answer quick thx Builtrite is considering purchasing a new machine that would cost $60,000 and the machine would be depreciated (straight line) down
P5 plz answer quick thx
Builtrite is considering purchasing a new machine that would cost $60,000 and the machine would be depreciated (straight line) down to $ o over its five-year life. At the end of five years, it is believed that the machine could be sold for $25,000. The current machine being used was purchased 3 years ago at a cost of $40,000 and it is being depreciated down to zero over its 5 year life. The current machine's salvage value now is $12,000. Also, a higher level of inventory would be needed in the amount of $4000 for the new machine. The new machine would increase EBDT by $56,000 annually. Builtrite's marginal tax rate is 34%. What is the TCF associated with the purchase of this machine? $18,100 $96,500 $20,500 522,100 Builtrite is considering purchasing a new machine that would cost $60,000 and the machine would be depreciated (straight line) down to $ o over its five-year life. At the end of five years, it is believed that the machine could be sold for $25,000. The current machine being used was purchased 3 years ago at a cost of $40,000 and it is being depreciated down to zero over its 5 year life. The current machine's salvage value now is $12,000. Also, a higher level of inventory would be needed in the amount of $4000 for the new machine. The new machine would increase EBDT by $56,000 annually. Builtrite's marginal tax rate is 34%. What is the TCF associated with the purchase of this machine? $18,100 $96,500 $20,500 522,100 Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started