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Use the following information to answer this two - part question. A firm is considering investing in a new machine that will cost $ 4
Use the following information to answer this twopart question.
A firm is considering investing in a new machine that will cost $ and will be depreciated straightline over five years. The firm's marginal tax rate is The firm plans to sell the machine after the years of use for scrap. It believes it can get $ for the scrap parts at that time.
What is the annual depreciation tax shield of purchasing the machine?
What is the incremental cash flow from selling the machine?
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