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A Question out of my book. It has the answers, but doesn't show the steps. A firm is considering purchasing a machine that costs $71000 .
A Question out of my book. It has the answers, but doesn't show the steps... I'm lost on how to start this, help would be appreciated:
A firm is considering purchasing a machine that costs $71000 . It will be used for six years, and the salvage value at that time is expected to be zero. The machine will save $42000 per year in labor, but it will incur $9000 in operating and maintenance costs each year. The machine will be depreciated according to five-year MACRS. The firm's tax rate is 35 %, and its after-tax MARR is 15 %. Should the machine be purchased?
The present worth of the project is: $_____
