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The Thorpe Corporation will purchase a $50,000 piece of production machinery with an estimated useful life of five years. The new machine is expected to
The Thorpe Corporation will purchase a $50,000 piece of production machinery with an estimated useful life of five years. The new machine is expected to allow an increase in sales of $80,000 per year, while increased incremental costs amount to $45,000 per year. The firm is in a 25 percent income tax bracket. Complete the following table to determine the first-year cash flow effect of the investment. (Input all answers as positive values.) Increased sales Increased costs Earnings before amortization and taxes Amortization Earnings before taxes Taxes Earnings after tax Amortization Net cash flow
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