Builtrite is considering purchasing a new machine that would cost $80,000 and the machine would be depreciated (straight

line) down to $0 over its five-year life. At the end of five years, it is believed that the machine could be sold for $15,000. The

current machine being used was purchased 3 years ago at a cost of $40,000 and it is being depreciated down to zero over its

5-year life. The current machine's salvage value now is $21,000. Also, a higher level of inventory would be needed in the

amount of $3000 for the new machine. The new machine would increase EBDT by $48,000 annually. Builtrite's marginal tax

rate is 34%.

What is the Initial Investment associated with the purchase of this machine?

O $60,300

O $63,700

O $56,300

O S50,640

Builtrite is considering purchasing a new machine that would cost $80,000 and the machine would be depreciated (straight line) down to $0 over its five-year life. At the end of five years, it is believed that the machine could be sold for $15,000. The current machine being used was purchased 3 years ago at a cost of $40,000 and it is being depreciated down to zero over its 5 year life. The current machine's salvage value now is $21,000. Also, a higher level of inventory would be needed in the amount of $3000 for the new machine. The new machine would increase EBDT by $48,000 annually. Builtrite's marginal tax rate is 34% What is the initial Investment associated with the purchase of this machine? $60,390 363700 $56300 $50.640