What the ratfcf associated with the purchase of the machine

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Builtrite is considering purchasing a new machine that would cost $80,000 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 $30,000 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 $38,000 annually. Builtrite's marginal tax rate is 34%.

Problem 1: What the RATFCF's associated with the purchase of this machine?

Reference no: EM132962982

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