Four-year project to improve its production efficiency

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Reference no: EM131526857

Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $515122 is estimated to result in $220252 in annual pretax cost savings. The machine is depreciated straight-line to zero over its five-year tax life, and it will have a salvage value at the end of the project of $152552. The shop's tax rate is 31 percent. What is the OCF (year 1)?

Reference no: EM131526857

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