Tanaka machine shop is considering a four year project to improve its production efficiency. buying a new
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Question:
Tanaka machine shop is considering a four year project to improve its production efficiency. buying a new machine press for $ is estimated to result in $ in annual pretax cost savings. The press falls in the MACRS five year class, and it will have a salvage value at the end of the project of $ The press also requires an initial investment in spare parts inventory of $ along with an additional $ in inventory for each succeeding year of the project. If the shop's tax rate is percent and its discount rate is percent, should the company buy and install the machine press?
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