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20. A special machine can save $11,200 per year in cash operating expenses for the...

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20. A special machine can save $11,200 per year in cash operating expenses for the next 10 years. The cost is $44,000. No salvage value is expected. Assume the tax rate averages 2/7 of taxable income, straight-line depreciation is used, and the cost of capital = 10%. The CFAT is (round to the nearest dollar): a $11,200 C. $8,480 b. $9,258 d. $6,800 20. A special machine can save $11,200 per year in cash operating expenses for the next 10 years. The cost is $44,000. No salvage value is expected. Assume the tax rate averages 2/7 of taxable income, straight-line depreciation is used, and the cost of capital = 10%. The CFAT is (round to the nearest dollar): a $11,200 C. $8,480 b. $9,258 d $6,800 21. Refer to the preceding question. The internal rate of return, using linear interpolation and rounding to two decimal places, is: a. 25.45% c. 12.34% b. 21.04% d 14.14%

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