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What is the after tax salvage cash flow for this new machine

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Reference no: EM133033828

Question - A company is considering a 5-year project to expand production with the purchase of a new automated machine using the latest technology. The new machine would cost $230,000 FOB St. Louis, with a shipping cost of $7,000 to the plant location. Installation expenses of $13,000 would also be required. This new machine would be classified as 7-year property for MACRS depreciation purposes. The project engineers anticipate that this equipment could be sold for salvage for $38,000 at the end of the project. If the corporate tax rate is 36%, what is the after tax salvage cash flow for this new machine at the end of the project?

Reference no: EM133033828

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