A New Machine Is Expected to Produce a MACRS Deduction

question 109

Multiple Choice

A new machine is expected to produce a MACRS deduction in three years of $50,000.

If the company has a 12% after-tax hurdle rate and is subject to a 30% income tax rate, the correct discounted net cash flow to include in an acquisition analysis would be:

• A) $0.
• B) $10,680.
• C) $24,920.
• D) $46,280.
• E) None of the other answers is correct.

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