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Your Firm Needs a Computerized Machine Tool Lathe That Costs

question 110

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Your firm needs a computerized machine tool lathe that costs $50,000, requires $10,000 in installation, $5,000 in freight charges, and another $12,000 in maintenance for each year of its three-year life. After three years, this machine will be replaced. The machine falls into the MACRS three-year class life category. Assume a tax rate of 30 percent and a discount rate of 12 percent. If the lathe can be sold for $7,000 at the end of year 3, what is the after-tax salvage value?

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Definitions:

Diffuse

To spread or disperse something widely, or to become less concentrated or focused.

Comprehend

To understand or grasp the meaning of something.

Custom-Tailored

Specifically designed or modified to meet the unique needs or preferences of an individual or organization.

Diffuse

To spread or scatter broadly, often used in the context of light, ideas, or substances.

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