Question: Create an excel model that can run this problem A company is considering whether or not to purchase an item of machinery costing $40,000 payable

Create an excel model that can run this problem A company

Create an excel model that can run this problem

A company is considering whether or not to purchase an item of machinery costing $40,000 payable immediately. It would have a life of 4years, after which it would be sold for $5,000. The machinery would create annual cost savings of $14,000. The company pays tax one year in arrears at an annual rate of 30% and can claim tax- allowable depreciation on a 25% reducing balance basis. A balancing allowance is claimed in the final year of operation. The company's cost of capital is 8%. Should the machinery be purchased

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