Equipment would require an increase in net working capital

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Reference no: EM13956220

The president of the company you work for has asked you to evaluate the proposed acquisition of a new chromatograph for th firm's R&D department. The equipments basic price is $70,000, and it would cost another $15,000 to modify it for special use by your firm. The chromatograph, which falls into the MACRS 3-year class, would be sold after 3 years for $30,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. Use of the equipment would require an increase in net working capital (spare parts inventory) of $4,000.

Reference no: EM13956220

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