In: Accounting
Ripit Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of tractors The outlay required is $480,000. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow:
Year Cash Revenues Cash Expenses
1 $780,000 $600,000
2 780,000 600,000
3 780,000 600,000
4 780,000 600,000
5 780,000 600,000
Required: