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ABC is considering replacing the existing unit with a newer, more efficient one. The unit,...

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Finance

ABC is considering replacing the existing unit with a newer, more efficient one. The unit, which originally cost $500,000, currently has a book value of $250,000. The new unit will cost $700,000 and in order to make the new unit operational, shipping and installation costs will require a further $50,000 investment. ABC can sell the existing machine today for $275,000. Assume ABCs tax rate is 30 percent. How much will be the initial investment of replacing the existing unit?

Question 19 options:

a)

(512,500)

b)

(522,500)

c)

(252,500)

d)

None of the above

Answer & Explanation Solved by verified expert
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