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Levels Tought:
Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 401 Weeks Ago, 1 Day Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Cost-Cutting Proposals. ADB Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $510 000 is estimated to result in $218 000 in annual pre-tax cost savings. ADB uses the diminishing value method for depreciation, and the rate for tax purposes is 30%. The machine press will have a salvage value at the end of the project of $64 000. The press also requires an initial investment in spare parts inventory of $21 000, along with an additional $3000 in inventory for each succeeding year of the project. If ADB's tax rate is 30% and its discount rate is 11%, should ADB buy and install the machine press?
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