Question: Question 6 (18 marks) Lovely Bear Shop is considering a 4-year project to improve its production efficiency. Buying a new machine press for $576,000 is

Question 6 (18 marks) Lovely Bear Shop is considering a 4-year

Question 6 (18 marks) Lovely Bear Shop is considering a 4-year project to improve its production efficiency. Buying a new machine press for $576,000 is estimated to result in $192,000 in annual pretax cost savings. The press falls in the MACRS 5-year class, and it will have a salvage value at the end of the project of $104,000. The shop's tax rate is 35 percent and its discount rate is 11 percent. Should the firm buy and install the machine press? Why or why not? MACRS Table - 5 years Year MACRS Percentage 1 20.00% 2 32.00 3 19.20 4 11.52 5 11.52 6 5.76

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