An industrial organization has bought a specialized machine for $100,000 which will save $24,000 each year...

An industrial organization has bought a specialized machine for $100,000 which will save $24,000 each year for 10 years. Straight Line (SL) basis depreciation should be taken into consideration with a depreciable life of 10 years. After tax MARR is 10% per year. Effective income tax rate is 30%. After 10 years, the machine will have zero salvage value. a) Draw a table showing Before Tax Cash Flow (BTCF) and After Tax Cash Flow (ATCF). b) Calculate the after tax PW and IRR. (Use interpolation method to find IRR). Is it feasible?

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Rahul Sunny answered 1 year ago

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