Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

you are considering adding a new software title to those published by your highly successful software company. If you add the new product, it will

you are considering adding a new software title to those published by your highly successful software company. If you add the new product, it will use capacity on your disk, duplicating machines that you had planned on using for your flagship product, Battlin Bobby. You had planned on using the unused capacity to start selling BB on the West Coast in two years. You would eventually have had to purchase additional duplicating machines 10 years from today but using the capacity for your new product will require moving this purchase up to 2 years from today. If the new machines will cost $115,000 and can be expensed under section 179, your marginal tax rate is 21 percent, and your cost of capital is 12 percent, what is the opportunity cost associated with using the unused capacity for new product? ( Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

Opportunity cost-

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions

Question

Which options are consistent with the purpose of the organisation?

Answered: 1 week ago