You are contemplating the replacement of an old printing machine with a new model costing $56,000. The old machine, which originally cost $40,000, has 6 years of expected life remaining and the current book value of $18,000 versus the current market value of $24,000. The firm's corporate tax rate is 27 percent. If the company sells the old machine at the market value, what is the initial after-tax cash outlay for the new printing machine purchase? Question 7 options: $33,410 $33,620 $33,890 $34,180 $34,460 $34,650
You are contemplating the replacement of an old printing machine with a new model costing $56,000. The old machine, which originally cost $40,000, has 6 years of expected life remaining and the current book value of $18,000 versus the current market value of $24,000. The firm's corporate tax rate is 27 percent. If the company sells the old machine at the market value, what is the initial after-tax cash outlay for the new printing machine purchase? Question 7 options: $33,410 $33,620 $33,890 $34,180 $34,460 $34,650
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
Problem 1PS
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Question
You are contemplating the replacement of an old printing machine with a new model costing $56,000. The old machine, which originally cost $40,000, has 6 years of expected life remaining and the current book value of $18,000 versus the current market value of $24,000. The firm's corporate tax rate is 27 percent. If the company sells the old machine at the market value, what is the initial after-tax cash outlay for the new printing machine purchase?
Question 7 options:
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$33,410
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$33,620
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$33,890
|
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$34,180
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$34,460
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$34,650
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