Question
Your manager asks you to evaluate which machine to adopt among several new models. One of the proposed new machine costs $41,000, with a 4
Your manager asks you to evaluate which machine to adopt among several new models. One of the proposed new machine costs $41,000, with a 4 year economic life. It will result in an operating cost of $5,330 before tax. The machine depreciates straight-line to zero over its life. After that, assume the salvage value is $6,560. Firm's corporate tax rate is 44% and discount rate is 11% .
What is after tax salvage value $ ;
what is annual operating cash flow $ ;
what is net present value of the new machine $ ;
what is equivalent annual cost (EAC) of this machine(enter cost as negative cash flow)?
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