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The Dauten Toy Corporation currently uses an injection molding machine that was purchased prior to the new tax legisfation. This machine is being depredated on
The Dauten Toy Corporation currently uses an injection molding machine that was purchased prior to the new tax legisfation. This machine is being depredated on a straight-line basis, and it has 6 years of remaining life. Its current book value is $2,400, and it can be sold for $2,500 at this time. Thes, the annual degreciation experise is $2,400/6=$400 per year. If the old machine is not replaced, it can be sold for $500 at the end of its uselul life. Dauten is offered a replacement machine which has a cost of 59,000 , an estimated useful life of 6 years, and an estimated salvage value of sBo0. The replaceingnt machine is eligible for 100% bonus depreciation at the time of purchase. The replacement machine would permit an output oxpansion, so sales. would rise by seon on year; even sb, the new machine's much greater efficiency would cause operating expenses to decine by $1,500 per year. The new machine would require that inventories be increased by $2,000, but accounts payable would simultaneously increase by 7800 . Dauten's marginal federal-plus-state tax rate is 25%, and ita Wicc Is 11%. What is the Noy of the incremental cash flow stream? Negative value, If any, should be indicated by a minus sign. Round your answer to the nearert cent. Should the company replace the old machine
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