Optimistic Company is evaluating the purchase of a new machine that costs $720,000, will have...
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Accounting
Optimistic Company is evaluating the purchase of a new machine that costs $ will have a CCA rate of an estimated useful life of years and a $ terminal disposal price. This piece of equipment would need a major overhaul at the end of years that is expected to cost $ Also, if this machine is purchased there will be a required increase in working capital of $ This entire amount will be released at the end of the machines useful life. The companys marginal tax rate is It is estimated that the machine will increase before tax profits by $ annually. Optimistic Company requires a after tax rate of return. Based on the above information, calculate the net present value of this option.
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