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The CFO of Acme Manufacturing is considering the purchase of a special diamond-tipped cutting tool. This tool has the following initial costs to put into
The CFO of Acme Manufacturing is considering the purchase of a special diamond-tipped cutting tool. This tool has the following initial costs to put into service. Acme will use cash to pay for all of these expenses, some of which was borrowed on a Iong-term credit line with the local bank. The CFO has been directed by Acme to use the MACRS depreciation method with a GDS recovery period of 5 years. Assume the tool is sold in the fifth year for $21,500. Is this a good investment? Click the icon to view the additional data on the revenues, expenses, and interest rates. Click the icon to view the GDS Recovery Rates (rk). Click the icon to view the interest and annuity table for discrete compounding when the MARR is 9% per year. Complete the blank cells in the table below. (Round to the nearest dollar.) The CFO of Acme Manufacturing is considering the purchase of a special diamond-tipped cutting tool. This tool has the following initial costs to put into service. Acme will use cash to pay for all of these expenses, some of which was borrowed on a Iong-term credit line with the local bank. The CFO has been directed by Acme to use the MACRS depreciation method with a GDS recovery period of 5 years. Assume the tool is sold in the fifth year for $21,500. Is this a good investment? Click the icon to view the additional data on the revenues, expenses, and interest rates. Click the icon to view the GDS Recovery Rates (rk). Click the icon to view the interest and annuity table for discrete compounding when the MARR is 9% per year. Complete the blank cells in the table below. (Round to the nearest dollar.)
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