Question: Builtrite is considering purchasing a new machine that would cost $60,000 and the machine would be depreciated (straight line) down to $0 over its five-year
Builtrite is considering purchasing a new machine that would cost $60,000 and the machine would be depreciated (straight line) down to $0 over its five-year life. At the end of four years, it is believed that the machine could be sold for $30,000. 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 it 5-year life. The current machine's salvage value now is $12,000. The new machine would increase EBDT by $56,000 annua Builtrite's marginal tax rate is 34%. What is the TCF associated with the purchase of this new machine if it is sold at the end of year 4 ? $30,000 $23.880 $20,500 $19,800
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
