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The Herford candy company was evaluating the option of buying a machine to increase production. The cost of the new machine was $2,400; it had

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The Herford candy company was evaluating the option of buying a machine to increase production. The cost of the new machine was $2,400; it had a life of eight years, had zero salvage value, and was depreciated for tax purposes on a straight-line basis over the life of the machine. The corporate income tax was 40 percent and the company has a depreciation amount of $200 on its existing assets. The company implemented a thorough analysis of revenues and benefits both before and after the purchase. Find the annual incremental net cash flow resulting from the investment in the new machine for the company. Without new machine With new machine Revenues $10,000 $12.500 Expenses other than depreciation $6,000 $7.500 O $640 $550 5600 5420

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