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Question 8 40 Points Macloy Corp is about to purchase a machine for their operations. The machine will cost $90,000 plus $25,000 for shipping and
Question 8 40 Points Macloy Corp is about to purchase a machine for their operations. The machine will cost $90,000 plus $25,000 for shipping and installation and falls under the 3-year MACRS class. Net working capital will rise by $4,000. Diana Thomason forecasts that revenues will increase by $100,000 for each of the next 4 years and will then be sold (scrapped) for $15,000 at the end of the fourth year, when the project ends. Operating costs will rise by $80,000 for each of the next four years. Macloy is in the 40% tax bracket. You are required to take a decision upon your expectation for future cash flows whether to buy the machine or not? Use the editor to format your
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