Question: Machine A: initial cost = 150,000; pre tax operating cost = 65,000; expected life 8 years Machine B: initial cost = 100,000; pre tax operating
Machine A: initial cost = 150,000; pre tax operating cost = 65,000; expected life 8 years Machine B: initial cost = 100,000; pre tax operating cost= 57,500; expected life 6 years The machine chosen will be replaced indefinitely and neither machine will have a differential impact on avenue. No change in NWC is required. The required retu rn is 10%, the CCA rate is 20% and the tax rate is 40%. Which machine should you buy?
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