Question: Builtrite is considering purchasing a new machine that would cost $ 9 0 , 0 0 0 and the machine would be depreciated ( straight
Builtrite is considering purchasing a new machine that would cost $ and the machine would be depreciated straight line down to $ over its fiveyear life. At the end of five years, it is believed that the machine could be sold for $ The current machine being used was purchased years ago at a cost of $ and it is being depreciated down to zero over its
year life. The current machine's salvage value now is $ Also, a higher level of inventory would be needed in the amount of $ for the new machine. The new machine would increase EBDT by $ annually. Builtrite's marginal tax rate is
What is the TCF associated with the purchase of this machine?
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