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Please show detail steps in equations/formula instead of excel table, thanks. Liquid Solution Inc. is considering a four-year project to improve its production efficiency Buying
Please show detail steps in equations/formula instead of excel table, thanks.
Liquid Solution Inc. is considering a four-year project to improve its production efficiency Buying a new machine press for $940,000 is estimated to result in $380,000 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $160,000. The press also requires an initial investment in spare parts inventory of S40,000, which will be recapped at the end of the project. If the shop's tax rate is 35 percent and its discount rate is 9 percent, should the company buy and install the machine press? Year 5-year MACRS Recovery Rate 20% 32% 19.2% 11 .52% 11.52% 5.76% 2Step by Step Solution
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