Question: 8. A machine has been purchased for $30,000 with an estimated life and salvage of 10 years and S5000. Straight line depr will be used.
8. A machine has been purchased for $30,000 with an estimated life and salvage of 10 years and S5000. Straight line depr will be used. The machine is expected to produce BTCF of $15,000, 17,300, and 19,150 for the next three years. The machine will be sold at the end of year 3 for its book value. . Inflation is expected to be 3.1%, 4.6%, and 2.7% for the next three years Calculate io (the real or constant S) after tax rate of return assuming this machine is sold at the end of year 3
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