American Analytics is considering a four-year project to improve its production efficiency. Buying a new machine press for $600,000 is estimated to result in $210,000 pretax cost savings annually. The press will be depreciated equally to zero per year and can be sold for $50,000 at the end of its life. The press also requires an initial investment in inventory of $30,000, along with an additional $2,000 in inventory for each succeeding year of the project. Tax rate is 24% and the discount rate is 9%. Should the company undertake the project?

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solution 1 2 3 4 annual pretax cost saving Less Depreciation6000004 Incom... View the full answer