The Target Copy Company is contemplating the replacement of its old printing machine with a new model costing $80,000. The old machine, which originally cost $40,000, has 6 years of expected life remaining and a current book value of $25,000 versus a current market value of $17,000. Target's corporate tax rate is 40 percent. If Target sells the old machine at market value, what is the initial after-tax cash outlay for the new printing machine? Round it a whole dollar and do not include the $ sign.

The Target Copy Company is contemplating the replacement of its old printing machine with a new model costing $80,000. The old machine, which originally cost $40,000, has 6 years of expected life remaining and a current book value of $25,000 versus a current market value of $17,000. Target's corporate tax rate is 40 percent. If Target sells the old machine at market value, what is the initial after-tax cash outlay for the new printing machine? Round it a whole dollar and do not include the $ sign.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 6P

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