The plant has accumulated savings of $80,000 to acquire a new machine for the Manufacture Department. The new machine costs $80,000. The Straight line depreciation method is used buy this plant in all its equipments. The income tax rate is 0.35. The new equipment will save $35,000 each year and its economic life is 5 years. The salvage value is $10,000. Does the acquisition of this new machine satisfy the 4% minimum rate? compute the present worth after tax cash flow. a. $18,693 Ob. $131,311 Oc-$80,000 Od. $37,204
The plant has accumulated savings of $80,000 to acquire a new machine for the Manufacture Department. The new machine costs $80,000. The Straight line depreciation method is used buy this plant in all its equipments. The income tax rate is 0.35. The new equipment will save $35,000 each year and its economic life is 5 years. The salvage value is $10,000. Does the acquisition of this new machine satisfy the 4% minimum rate? compute the present worth after tax cash flow. a. $18,693 Ob. $131,311 Oc-$80,000 Od. $37,204
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![The plant has accumulated savings of $80,000 to acquire a new machine for the Manufacture Department. The new machine costs $80,000. The Straight line depreciation method is used buy
this plant in all its equipments. The income tax rate is 0.35. The new equipment will save $35,000 each year and its economic life is 5 years. The salvage value is $10,000. Does the acquisition
of this new machine satisfy the 4% minimum rate? compute the present worth after tax cash flow.
a. $18,693
Ob. $131,311
Oc-$80,000
Od. $37,204](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7252486d-081b-4324-96d2-9680fa3531a0%2Fc913e508-56ca-4fc8-a6bc-eb6292dfc36e%2F2onf6ac_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The plant has accumulated savings of $80,000 to acquire a new machine for the Manufacture Department. The new machine costs $80,000. The Straight line depreciation method is used buy
this plant in all its equipments. The income tax rate is 0.35. The new equipment will save $35,000 each year and its economic life is 5 years. The salvage value is $10,000. Does the acquisition
of this new machine satisfy the 4% minimum rate? compute the present worth after tax cash flow.
a. $18,693
Ob. $131,311
Oc-$80,000
Od. $37,204
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