What the ratfcf associated with the purchase

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Problem:

Builtrite is considering purchasing a new machine that would cost $70,000 and the machine would be depreciated (straight line) down to $0 over its 10 year life.  At the end of 10 years it is believed that the machine could be sold for $10,000.  The current machine being used was purchased 3 years ago at a cost of $20,000 and it is being depreciated down to zero over its 5 year life.  The current machine's salvage value now is $15,000. The new machine would increase EBDT by $54,000 annually. Builtrite's marginal tax rate is 34%.

What the RATFCF's associated with the purchase of this machine?

Reference no: EM133204897

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