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ast year you purchased a machine for $1M. You want to sell it today for $0.8M and replace it with a new machine that costs $1.2M. Both machines are classified as 20-year property (with depreciation rates of 5% and 9.5% in the first two years). The replacement will increase EBITDA by $100,0000. What are the cash flows at the time of replacement? The tax ra

ast year you purchased a machine for $1M. You want to sell it today for $0.8M and replace it with a new machine that costs $1.2M. Both machines are classified as 20-year property (with depreciation rates of 5% and 9.5% in the first two years). The replacement will increase EBITDA by $100,0000. What are the cash flows at the time of replacement? The tax ra

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Last year you purchased a machine for $1M. You want to sell it today for $0.8M and replace it with a new machine that costs $1.2M. Both machines are classified as 20-year property (with depreciation rates of 5% and 9.5% in the first two years). The replacement will increase EBITDA by $100,0000. What are the cash flows at the time of replacement? The tax rate is 35%. Group of answer choices -$452,000 -$400,000 -$152,500 -$347,500 -$300,000

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