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PLEASE DO NOT USE EXCEL The DCM Enterprises buys a machine for $20,000. The company uses the MACRS three-Year Property Class for depreciation. The company

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PLEASE DO NOT USE EXCEL

The DCM Enterprises buys a machine for $20,000. The company uses the MACRS three-Year Property Class for depreciation. The company sells the machine for $10,000 at the end of the third year. During the three years the company made a profit of $ 8,000 per year due to this investment. When the machine was sold the company's accounting ledgers showed a book value of $5,760 for this investment. The company's effective tax rate is 28% per year and its MARR is 12%. (a) Complete the following table (15 points): Year BTCF Depreciation Book Value ATCF Taxable Income Income Tax PW of ATCF 0 1 1 2 3 3 (b) Was the book value of $5,760 correct? If not, what was the actual book value (4 points)? (c) Was the project profitable for the company? Explain if the answer is yes or no (6 points)

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