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please show work for all The Select Comfort Company purchased a mattress-stuffing machine 5 years ago for $70,000. When purchased, it had an estimated salvage
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The Select Comfort Company purchased a mattress-stuffing machine 5 years ago for $70,000. When purchased, it had an estimated salvage value of $5,000 at the end of seven years. Last year, the mattress machine was overhauled at a cost of $3,000. The old machine can be sold today for $20,000. A new machine can be purchased for $69,300. It has a 2-year life and is expected to reduce operating expenses by $50,000 per year. After 2 years, the new machine can be sold for $20,000. The company's cost of capital is 9% and the tax rate is 35%. Assume that depreciation is not tax deductible. Answer the following questions. What are the initial cash flows? (Answer in dollars and round to the nearest dollar.) $ -49800 X Check Answer What are the operating cash flows at the end of the first year? (Answer in dollars and round to the nearest dollar.) $ 32500 Check Answer What are the terminal year cash flows? (Answer in dollars and round to the nearest dollar.) $ 52500 X Check Answer What is the NPV of the replacement cash flows? (Answer in dollars and round to the nearest dollar.) $ 24205 XStep by Step Solution
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