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 five years it is believed that the machine could be sold for $15,000. The current machine being used was purchased 2 years ago at a cost of $50,000 and it is being depreciated down to zero over its 5 year life. The current machine's salvage value now is $20,000. The new machine would increase EBDT by $42,000 annually and would require an additional $3000 in inventory. Builtrite's marginal tax rate is 34%. What is the Initial Investment associated with the purchase of this machine? $38,640 $36,600 $34,600 $39,600

Bultrite is conuidering purchasing a new machine thut would cost $60,000 and the machine woula be depreciated (stralght line) down 10 \$0 over its five year lide. At the end of five years in is believed that the machine could be sold for $15,000. The current machine being uned was purchined 2 yeors ago at a cost of 5 sa, 000 and it is being depreciated down lo zero over its 5 year life. The cument machines salvage value now is 520,000 . The new machine would increase EBot br 842.000 annually and would reguire an additional $3000 in inverhory Bulhites morginal tax rate is 34K What in the intial Investmert associned with the purchase of this machen? Ban.aso $36000 194600 530600