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Author Question: The Munsell Color Company is considering the purchase of a new batch polymer-bonding machine for ... (Read 39 times)

bb

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on: Apr 25, 2021
The Munsell Color Company is considering the purchase of a new batch polymer-bonding machine for producing its number one line of crayons. Although the machine being considered will not produce any increase in sales revenues, it will result in the before-tax reduction of labor costs by $200,000 per year. The machine has a purchase price of $250,000, and it would cost an additional $10,000 to install the machine. In addition, to operate this machine, inventory must be increased by $15,000. The machine is categorized as 10-year property. After 2 years, it can be sold for $150,000. The tax rate is 34% and the cost of capital is 15%. What is the initial cash flow for the project?

MACRS Depreciation Rates
Year10-Year15-Year
110.00%5.00%
218.00%9.50%
314.40%8.55%

◦ -$250,000
◦ -$260,000
◦ -$265,000
◦ -$275,000
◦ -$285,000
Corporate Finance Online ¦ Eakins, McNally ¦ 2nd Edition
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Marked as best answer by bb on Apr 25, 2021

AaaA

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Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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bb

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Reply 2 on: Apr 25, 2021
:D TYSM

AmberC1996

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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