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

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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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
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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