Question: Adler is replacing its old packaging line with a more efficient line. the old line was being depreciated on s straight line basis at a
Adler is replacing its old packaging line with a more efficient line. the old line was being depreciated on s straight line basis at a rate of $20000 per year. the old machine had a current book value of $100000. the new line which costs $910000 will be depreciated on a straight line basis for 7 years to a $35000 estimated salvage value. the more efficient operation is expected to increase revenues by $50000 per year and reduce annual operating costs by $80000. compute the net cash flows for Adler in year 2. assume Adler has a marginal tax rate of 40
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