Question: Can someone Explain this. PLEASE READ END QUESTION Ringo Manufacturing is considering the purchase of a new machine for $60,000. The machine is expected to

 Can someone Explain this. PLEASE READ END QUESTION Ringo Manufacturing is

Can someone Explain this. PLEASE READ END QUESTION

Ringo Manufacturing is considering the purchase of a new machine for $60,000. The machine is expected to save the firm $12,000 (before tax) per year in operating costs over a 5 year period, and can be depreciated on a straight-line basis to a zero salvage value over its life. Alternatively, the firm can lease the machine for $3,000 per year for 5 years, with the first payment due in 1 year. The firm's tax rate is 15%, and its before tax cost of debt is 10%. The after tax incremental annual cash flow with the lease is: ENTER ANSWER TO THE DOLLAR. DO NOT ENTER COMMAS OR "$" SIGNS. ENSURE YOU INCLUDE A "-"IF THE ANSWER IS NEGATIVE d 9,021 ers 7,650 (with margin: 0) Question 4 0 / 1 pts Ringo Manufacturing is considering the purchase of a new machine for $80,000. The machine is expected to save the firm $15,000 (before tax) per year in operating costs over a 5 year period, and can be depreciated on a straight-line basis to a zero salvage value over its life. Alternatively, the firm can lease the machine for $8,000 per year for 5 years, with the first payment due in 1 year. The firm's tax rate is 20%, and its before tax cost of debt is 10%. The depreciation tax shield each year is: ENTER ANSWER TO THE DOLLAR. DO NOT ENTER COMMAS OR "$" SIGNS. ENSURE YOU INCLUDE A "-"IF THE ANSWER IS NEGATIVE d 3,000 ers 3,200 (with margin: 0)

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