A company is considering investing in one of two machines: one new or one it...
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Accounting
A company is considering investing in one of two machines: one new or one it already has been using. If the old machine, acquired three years ago, has four years of remaining life, what is the present value of the tax savings generated by straight-line depreciation over its remaining life. The original cost of the machine was $448,000. The cost of capital is 12% and the tax rate = 40%. Round to nearest whole dollar.
a. $25,600
c. $112,000
b. $77,747
d. $136,058
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