Your Company Is Considering the Purchase of a New Machine

question 84

Multiple Choice

Your company is considering the purchase of a new machine. The original cost of the old machine was $75,000; it is now five years old, and it has a current market value of $35,000. The old machine is being depreciated over a 10-year life toward a zero estimated salvage value on a straight-line basis, resulting in a current book value of $37,500 and an annual depreciation expense of $7,500. The old machine can be used for six more years but has no market value after its depreciable life is over. Management is contemplating the purchase of a new machine whose cost is $80,000 and whose estimated salvage value is zero. Expected before-tax cash savings from the new machine are $15,000 a year over its full MACRS depreciable life. Depreciation is computed using MACRS over a five-year life, and the cost of capital is 15 percent. Assume a 40 percent tax rate. What will the year 1 operating cash flow for this project be?

• A)$3,900
• B)$4,480
• C)$12,400
• D)$16,600

Identify the special regulations and standards for different professions.

Understand the role and importance of evidence and defenses in legal claims.

Analyze the significance of landmark cases in the development of negligence law.

Distinguish between different types of bonds and their legal implications.

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Definitions:

Action Guide

A resource or tool that provides advice and strategies to accomplish specific goals or tasks.

Justification

The action of showing something to be right or reasonable, often used in legal and ethical contexts.

Anterior Motive

A motive or reason for action that predates the current situation or decision.

Syphilis

A sexually transmitted infection caused by the bacterium Treponema pallidum, known for its varied and often severe health effects.