Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. q. no. 8: azba corporation is considering automati

Q. No. 8: Azba corporation is considering automating its pen factory with the purchase of...

70.2K

Verified Solution

Question

Finance

Q. No. 8: Azba corporation is considering automating its pen factory with the purchase of a $575,000 new machine. Shipping and installation would cost $15,000. Smith has calculated that automation would result in before-tax savings of $65,000 a year due to reduced material costs and $65,000 a year due to reduced labor costs. The machine has a useful life of 5 years and the estimated salvage value of the machine at the end of five years is $100,000. The old machine is fully depreciated but has a salvage value today of $80,000 which can be sold at this value. The firm's marginal tax rate is 40 percent and the firm uses the straight-line depreciation method. Should Azba automate or not based on your calculations using the Profitability Index?

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: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Calculus
1.2K views

OT inequ 10 9 00 T 9 y x 3 5 y x 2 4...

Algebra
1.2K views

El n mero complejo 3 i en forma trigonom trica es O a 2 cis...

Algebra
1.2K views

Factor the expression completely 7x 7x 84 7x 7x 84

Algebra
1.2K views

Compute each sum below If applicable write your answer as a fraction 2 2 3...

Accounting
1.2K views

Problem 3-13 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement...

Accounting
1.2K views

Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over...

Accounting
1.2K views

Rules of the New York Stock Exchange (NYSE) and the NASDAQ, which apply to firms...

Accounting
1.2K views

IN EXCEL FORMAT

Accounting
1.2K views

Use the Telex Information to comnlete the following auestions: se the information below to attempt...

Accounting
1.2K views

Un empleado recibe un salario por hora de$15, con tiempo y medio por todas las...

Accounting
1.2K views

The name of my chosen organization is Kasapreko Company limited based in Ghana. ...

Finance
1.2K views

Cumberland Industries: Income Statement (Thousands of dollars) 2019 Sales ...