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10. A financial analyst has collected the following information about the machine to be replaced...

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Finance

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10. A financial analyst has collected the following information about the machine to be replaced - The purchase price of the new machine is $8,000 Shipping and installation cost $1,000 -The selling price of the old machine today is $5,000. -The stock will increase by $2,000 if The machine was installeda Tax rate 25% Life of accounts receivable will increase by $1,000 New machine aged 4 years and depreciation on a straight line. a Installing the new machine achieves savings of $5000 annually if the capital cost is 10%, do you accept the replacement of the machine? (4 marks)

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