Financial management

You have been asked by the management of your company to evaluate the proposed acquisition of a new machine.  The machine’s basic price is $50,000, and it will cost another $10,000 to modify it for the special use by your company.  The machine falls into the MACRS 3-year class property (the MACRS percentage allowances are 0.33, 0.45, 0.15, and 0.07 in years 1,2,3,and 4 respectively).  The project will require an increase in net working capital of $2,000 and it will last for three years at the end of which the machine can be scrapped for $20,000.  The purchase of this machine will have no effect on revenues, but the management expects to have labor cost savings of $20,000 per year.  The marginal tax rate of your company is 40 percent.

Don't use plagiarized sources. Get Your Custom Essay on
Financial management
Just from $13/Page
Order Essay
Place Order
Grab A 14% Discount on This Paper
Pages (550 words)
Approximate price: -
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Try it now!

Grab A 14% Discount on This Paper

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.