A company is considering purchasing a new machine that would cost $60,000 and the machine would...

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A company is considering purchasing a new machine that wouldcost $60,000 and the machine would be depreciated (straight line)down to $0 over its four year life. At the end of four years it isbelieved that the machine could be sold for $12,000. The machinewould increase EBDT by $42,000 annually. the company's marginal taxrate is 34%.
What the RATFCF’s associated with the purchase of thismachine?
$31,800
$32,820
$30,452
$29,940

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Solution The RATFCFs associated with the See Answer

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A company is considering purchasing a new machine that wouldcost $60,000 and the machine would be depreciated (straight line)down to $0 over its four year life. At the end of four years it isbelieved that the machine could be sold for $12,000. The machinewould increase EBDT by $42,000 annually. the company's marginal taxrate is 34%.What the RATFCF’s associated with the purchase of thismachine?$31,800$32,820$30,452$29,940