Question: Your firm needs a computerized machine tool lathe which costs $140,000, will generate $100,000 in cost savings, and requires $12,000 in net working capital for

Your firm needs a computerized machine tool lathe which costs $140,000, will generate $100,000 in cost savings, and requires $12,000 in net working capital for the project's life of 5 years. After 5 years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 30% and a discount rate of 12%. Calculate the depreciation and tax expense for this project in year 2

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