Determine the net investment

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Reference no: EM131603415

Okie Industries purchased a CNC machine 5 years ago for $125,000. It is being depreciated on a straight-line basis over 15 years to an estimated salvage value of $0. It could be sold now for $50,000. The firm is considering selling if and purchasing a new one. The new CNC machine would cost $208,750 installed and would be depreciated straight-line over 10 years to an estimated $0 salvage value. The firm’s marginal tax rate is 40%. Determine the net investment if the old machine is sold and the new one purchased. show work.

Reference no: EM131603415

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