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Ten years ago J-Bar Company purchased a lathe for $225,000. It was being depreciated on a straight-line basis to an estimated salvage value of zero

Ten years ago J-Bar Company purchased a lathe for $225,000. It was being depreciated on a straight-line basis to an estimated salvage value of zero over a 15 year period. The firm is considering selling the old lathe and purchasing a new one. The new lathe would cost $500,000. The firm's marginal tax rate 40 percent. Determine the initial outflow (or net investment) required to purchase the new lathe, if the old lathe is sold for $100,000.

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