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Y5 FAME Industries is a small business expanding its machining operations and plans to purchase 10 CNC machines for a total of $1,500,000; this is
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FAME Industries is a small business expanding its machining operations and plans to purchase 10 CNC machines for a total of $1,500,000; this is considered MACRS 5-year property. The business estimates that these machines will generate an additional revenue of $275,000 per year; they plan to keep the machines for the next 8 yea rs. At the end of 8 years, the CNC machines would have a salvage value of $165,000. The tax rate is 25%, the CNC machines are eligible for a Section 179 deduction, and FAME Industries uses an aftertax MARR of 7%. Compute the PW and determine whether FAME Industries should invest in the CNC machines. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRSGDS percentages page. Click here to access the MACRSGDS percentages for 27.5year residential rental property. Carry all interim calculations to 5 decimal places and then round your nal answer to a whole number. The tolerance is :20. Should FAME Industries invest in the CNC machines? No vStep by Step Solution
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