need both answersd with explaination on how to do them You are...
60.1K
Verified Solution
Link Copied!
Question
Accounting
need both answersd with explaination on how to do them
You are considering the purchase of a new machine that will cost $200,000 and be depreciated over five years using straight-line depreciation. You expect that it will require $20,000 per year in annual maintenance, and that you will need to purchase $10,000 in spare parts at the time you purchase the machine. You will maintain a steady inventory of spare parts until you sell off the machine in four years for $32,000, at which time your inventory of spare parts will be zero. You also expect that you will need to spend $4,000 in initial training for your employees on how to use the machine most effectively. If your tax rate is 25%, and your WACC is 10%, please answer the following questions. Question 1 1 pts What is the net salvage value of your machine in four years? $32,000 $42.000 O $40,000 $34.000 Question 2 1 pts What is the operating cash flow created each year by purchasing this machine? -$5,000 $20,000 -$45.000 -$60,000
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
