Should you buy the machine if machine has no salvage value

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Jim is considering buying a machine for $100,000. It will produce 5,000 somethings and each something will cost $2.00 to make. These somethings sell for $15.00. The machine's economic life of 5 years will be depreciated straight-line to $0.

The machine has no salvage value. The discount rate is 10% and the tax rate is 35%. Should you buy the machine?

Reference no: EM131959787

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