Question 5 2 pts A $73,000 machine with a 8-year class life was purchased 6 years ago. The machine will now be sold for $22,000 and replaced with a new machine costing $54,000, with a 5-year class life. The new machine will not increase sales, but will decrease operating costs by $16,000 per year. Simplified straight line depreciation is employed for both machines, and the marginal corporate tax rate is 34 percent. What is the initial outlay for the project? NOTE-- ALTHOUGH THE INITIAL OUTLAY IS NEGATIVE, PLEASE ENTER YOUR ANSWER AS A POSITIVE SIGN. IN OTHER WORDS, IF YOUR ANSWER IS -10,000, ENTER IT AS 10,000. DO NOT ENTER THE DOLLAR SIGN.
Question 5 2 pts A $73,000 machine with a 8-year class life was purchased 6 years ago. The machine will now be sold for $22,000 and replaced with a new machine costing $54,000, with a 5-year class life. The new machine will not increase sales, but will decrease operating costs by $16,000 per year. Simplified straight line depreciation is employed for both machines, and the marginal corporate tax rate is 34 percent. What is the initial outlay for the project? NOTE-- ALTHOUGH THE INITIAL OUTLAY IS NEGATIVE, PLEASE ENTER YOUR ANSWER AS A POSITIVE SIGN. IN OTHER WORDS, IF YOUR ANSWER IS -10,000, ENTER IT AS 10,000. DO NOT ENTER THE DOLLAR SIGN.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question 5
2 pts
A $73,000 machine with a 8-year class life was purchased 6 years ago. The
machine will now be sold for $22,000 and replaced with a new machine
costing $54,000, with a 5-year class life. The new machine will not increase
sales, but will decrease operating costs by $16,000 per year. Simplified
straight line depreciation is employed for both machines, and the marginal
corporate tax rate is 34 percent. What is the initial outlay for the project?
NOTE-- ALTHOUGH THE INITIAL OUTLAY IS NEGATIVE, PLEASE
ENTER YOUR ANSWER AS A POSITIVE SIGN. IN OTHER WORDS, IF
YOUR ANSWER IS -10,000, ENTER IT AS 10,000. DO NOT ENTER THE
DOLLAR SIGN.
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