$($A$)$SSET EXPANSION$)$

Ex: $($page $314)($morginal tax rate $40\%)$ The Faversham Fish Farm is consideing the considering the

introduction of a new fish$-$flaking facility. To launch the ficis introduction of a new fish$-$flaking facility. To launch the focility, it will need to spend $$90000$ for special equipment. The equipment has a useful life of four years and is in the three$-$yeor property class for tax purposes. Shlpping and installation expenditres equal $$10000,$ and the machinery has on expected final salvoge value, four yeors from now, of $$16500.$ The machinery is to be housed in an abandored worhouse next to the main processing plort. The old worehouse has no alternative economic use. No additional "net" working copital is needed. The moketing deportment envioions that use of the new facility will generate additional net operating revenue cash flous, before consideration of depreciation ond taves, as follows: