8% discount rate, 4-year lifespan, straight-line depreciation, 21% tax rate. You pay $100K for a machine that reduces costs (increasing revenue) by $35K per year for 4 years. The machine then vanishes without a trace (or a haulaway cost). What's th NPV of the decision to buy the machine?
8% discount rate, 4-year lifespan, straight-line depreciation, 21% tax rate. You pay $100K for a machine that reduces costs (increasing revenue) by $35K per year for 4 years. The machine then vanishes without a trace (or a haulaway cost). What's th NPV of the decision to buy the machine?
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 2P
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