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YYY Company wants to expand its business and is evaluating whether to add a new machine to support the expansion. The machine will cost $300,000
YYY Company wants to expand its business and is evaluating whether to add a new machine to support the expansion. The machine will cost $300,000 to purchase and install. Adding the machine will increase YYY Companys annul revenues by $99,000 for the next four years; operating costs, excluding depreciation, will not change if the machine is purchased. In four years, YYY Company expects to be able to sell the machine for $12,000. The machine will be depreciated according to the MACRS 3-year class of assets. YYY Companys marginal tax rate is 20 percent, and its required rate of return is 12 percent. Should YYY Company purchase the machine
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