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Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $511666 is estimated to result
Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $511666 is estimated to result in $198606 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 $108775. The shop's tax rate is 28 percent. What is the OCF for year 4?
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Modified ACRS Depreciation Allowances (Table 10.7) Year Three-Year Five-Year Seven-Year 33.33% 44.45 14.81 7.41 20.00% 32.00 19.20 11.52 11.52 5.76 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46 4 6 7 8Step by Step Solution
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