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Q2) Company XYZ is going to make an investment for a 4 year project. During this investment, they are going to buy a new machine
Q2) Company XYZ is going to make an investment for a 4 year project. During this investment, they are going to buy a new machine at a price of $30,000. The machine is going to be depreciated according to 3-Year MACRS. Each year, the investment brings revenue of $26,000 and the annual operating \& manufacturing expenses is $11,000. The working capital requirement is $2,000 and the average tax rate is 40%. Partial cash flow information of this investment is given below
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