Question: ASAPPPPP!!!! Quick Machine Shop is considering a four-year project to improve its production efficiency, Buying a new machine for $390,000 is estimsted to result in

Quick Machine Shop is considering a four-year project to improve its production efficiency, Buying a new machine for $390,000 is estimsted to result in 3135,000 in annul pretax cost savings, The press falls in the MACRS fwe-vear class, and it will have a peretax salvage value at the end of the oroject of $198,000. The MA,CRS rates are 2,32,192,1152,1152, and .0576 for Years 1 to 6 , respectively, Ignore bonus depreciation, The press also requires an initia Investment in inventory of $8,000, alone with an additional $1,500 in inventory for each succecding year of the project, The inventory will return to its otiginal level when the project ends. The shop's tax rate is 21 percent and its discount rate is 16 percent, 5 hould the firm buy and install the machine? Why or whr noe? .2,.32,.192,.1152,.1152, and .0576 for Years 1 to 6 , respectively. Ignore bonus 0 , along with an additional $1,500 in inventory for each succeeding year of the pro shop's tax rate is 21 percent and its discount rate is 16 percent. Should the firm b
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
