Your firm is planning to install a CNC machine for manufacturing finished plastic parts. This machine...
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Your firm is planning to install a CNC machine for manufacturing finished plastic parts. This machine has an initial cost of $1,000,000 and is expected to generate net income of $325,000 per year for the next 4 years. Using 40% bonus depreciation followed by MACRS depreciation, $50,000 salvage value, a federal tax rate of 21%, a state tax rate of 5%, and an after-tax MARR of 6%, determine the net present worth of this investment. Year 0 1234 1 2 Year 0 1 2 234 3 Before-Tax Cash Flow Income Taxes Depreciation After-Tax Cash Flow Net present worth Taxable Income Present Worth Your firm is planning to install a CNC machine for manufacturing finished plastic parts. This machine has an initial cost of $1,000,000 and is expected to generate net income of $325,000 per year for the next 4 years. Using 40% bonus depreciation followed by MACRS depreciation, $50,000 salvage value, a federal tax rate of 21%, a state tax rate of 5%, and an after-tax MARR of 6%, determine the net present worth of this investment. Year 0 1234 1 2 Year 0 1 2 234 3 Before-Tax Cash Flow Income Taxes Depreciation After-Tax Cash Flow Net present worth Taxable Income Present Worth
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Steps Step 1 of 3 Initial cost of investment 1000000 Profit after tax per year 325000 Time period 4 ... View the full answer
Related Book For
Contemporary Business Mathematics with Canadian Applications
ISBN: 978-0134141084
11th edition
Authors: S. A. Hummelbrunner, Kelly Halliday, Ali R. Hassanlou, K. Suzanne Coombs
Posted Date:
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