Uses a confectionery mixer for its normal operations

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Gabe's Candy uses a confectionery mixer for its normal operations. It is considering upgrading its mixer. The current mixer is fully depreciated and has no salvage value. The new mixer could $30,000, including delivery and installation. The new mixer is expected to last 6 years and could be depreciated on a stragiht ine bassis of $5,000 per year. The new mixer is expected to have no salvage value. The new mixer would provide $6,000 per year in ore teax saving with no additional operating costs. Gabe's corportate tax rate is 40%. What would be the first years cash flow CF1 be if the new mixer was purchased?

Reference no: EM132055484

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