Question: A) Sell the machine at time zero for xdollars with zero book value and paying the tax of40%. B) Keep the machine, which requires a

 A) Sell the machine at time zero for xdollars with zero
book value and paying the tax of40%. B) Keep the machine, which

A) Sell the machine at time zero for xdollars with zero book value and paying the tax of40%. B) Keep the machine, which requires a maj is depreciable from time 1 to year 6 (over six years) based on MACRS 7-year life depreciation with the half year convention (tabl A-1 In this case machine can produce and generate equal annual revenue of 400,000 dollars for six years and salvage value of the machine will be $200,000 with zero book value at the end of year 6. The operating cost ofthe machine will be $80,000 per year from year year 6. Calculate the sale value,x, that can break-even the NPv ofkeeping the machine. Consider 40%income tax rate and after-tax minimum ROR of 8%

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