Question: Question 31 You are considering two machines, A and B that can be used for the same purpose. Machine A costs $250,000, will reduce costs
Question 31 You are considering two machines, A and B that can be used for the same purpose. Machine A costs $250,000, will reduce costs by $70,000 per year, needs net working capital of $20,000 at time zero which be released at the end of the project, has a 5 year straight line depreciable life and can be sold at the end of the project's life for $50,000, Machine B costs $320,000, will reduce costs by the same $70,000 per year, has net working capital of $40,000 at time zero (also released at the end of its life). has a ten year straight line depreciable life and can be sold at the end of its life for $60,000. Assume that the tax rate is 21% and the discount rate is 10%. What are the after tax salvage values for project A and B at the end of their lives? Don't include the annual operating cash flows in this calculation, just the salvage value plus or minus any tax benefit or liability, O $50,000 for A and $60,000 for B $31.000 for A and $37.200 for B O $23,000 for A and $43,100 for B $39,500 for A and $47.400 for B $40,000 for A and $50,000 for B
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