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Stanton inc is considering the purchase of a new machine that'll reduce before tax cash operations cost by 5000 annually and increase sales by 10000
Stanton inc is considering the purchase of a new machine that'll reduce before tax cash operations cost by 5000 annually and increase sales by 10000 annually. It will use marcs method to deprecate machine and will sell machine at the end of 5th yr for 15000 before tax. Marginal rate 21% and uses 10% cost of capital . Machine has marcs class life of 5 yrs. Dep rates 20% 32% 19.2% 11.52% 11.52% and 5.76 for years 1-6. Machine cost 600000. What is after tax cash flow of new machine t=4 (cf4)? T=5 (cf5) and npv of new machine?
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