Jones Crusher Company is evaluating the proposed acquisition of a new machine. The machine will cost...
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Jones Crusher Company is evaluating the proposed acquisition of a new machine. The machine will cost $100,000. The machine will be sold after 3 years of use for $50,000. The machine will require an increase in net working capital of $5,000 and will have no effect on revenues, but is expected to save the firm $15,000 per year in before-tax operating costs, mainly labor. The company's marginal tax rate is 40%. What are the initial cash flows for the project? O $115,000 -$55,000 O -$155,000 O-$105,000 Jones Crusher Company is evaluating the proposed acquisition of a new machine. The machine will cost $100,000. The machine will be sold after 3 years of use for $50,000. The machine will require an increase in net working capital of $5,000 and will have no effect on revenues, but is expected to save the firm $15,000 per year in before-tax operating costs, mainly labor. The company's marginal tax rate is 40%. What are the initial cash flows for the project? O $115,000 -$55,000 O -$155,000 O-$105,000
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Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
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