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Blue Line Machine Shop is considering a four-year project to improve its production efficiency. Buying a...
Blue Line Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $556800 is estimated to result in $185600 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $81200. The press also requires an initial investment in spare parts inventory of $23200, along with an additional $3,480 in inventory for each succeeding year of the project. The shop’s tax rate is 23 percent and the project's required return is 10 percent.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
Blue line machine shop is considering a four-year project to improve its production efficiency. Buying a...
Blue line machine shop is considering a four-year project to
improve its production efficiency. Buying a new machine press for
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have a salvage value at the end of the project of $45,000. The
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savings. The press falls in the MACRS five year class, and it will
have a salvage value at the end of the project of $89,000. The
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Massey Machine Shop is considering a four year project to improve its production efficiency. Buying a...
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improve its production efficiency.
Buying a new machine press for $730,000 is estimated to result
in $220,000 in annual pretax
cost savings. The press falls in the MACRS five year class, and
it will have a salvage value
at the end of the project of $89,000. The press also requires an
initial investment in spare parts
inventory of $26,000, along with an additional $3,000 in
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is estimated to result in $97,000 in annual pretax cost savings.
The press falls in the MACRS five-year class, and it will have a
salvage value of $70,000. The press also requires an initial
working capital of $21,000, along with an additional $3,000 in
working capital for each succeeding years of project. The tax rate
is 34%, and the company's...
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savings. The press falls in the MACRS five-year class, and it will
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end of the project of $86,695. The OCFs of the project during the 4
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The press also requires an initial investment in spare parts
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Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
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improve its production efficiency. Buying a new machine press for
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have a salvage value at the end of the project of $81,000. The
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succeeding year of the...
Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...
Geary Machine Shop is considering a four-year project to improve
its production efficiency. Buying a new machine press for $950,400
is estimated to result in $316,800 in annual pretax cost savings.
The press falls in the MACRS five-year class (MACRS Table), and it
will have a salvage value at the end of the project of $138,600.
The press also requires an initial investment in spare parts
inventory of $39,600, along with an additional $5,940 in inventory
for each succeeding year...
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