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Shaquille Inc. is considering a four - year project to improve its production efficiency. Buying a machine for $ 1 , 0 0 0 ,
Shaquille Inc. is considering a fouryear project to improve its
production efficiency. Buying a machine for $ is
estimated to result in $ in annual pretax cost savings.
The machine falls into Class for CCA purposes CCA rate of
percent per year and it will have a salvage value at the end
of the project of $ The machine also requires an initial
investment in spare parts inventory of $ that will be
regained at the end of the project. If the tax rate is percent
and its discount rate is percent, should Shaquille buy the
machine?
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