Question
The Awesome Blueberry Co. is evaluating the proposed acquisition of a new machine to pick blueberries. The machines base price is $249,000 and it would
The Awesome Blueberry Co. is evaluating the proposed acquisition of a new machine to pick blueberries. The machines base price is $249,000 and it would require another $20,000 for modification. The machine falls into the MACRS 3-year class [33%, 45%, 15%, and 7%]. It is estimated that it can be sold for $75,000 after 3-years, which is the life of the project. A one-time increase in net working capital of $10,000 is required initially. The machine will primarily save the company $75,000 per year in operating costs. The tax rate is 35%. What is the final year total cash flow?
$128,213 | ||
$140,000 | ||
$160,458 | ||
$155,823 |
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