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1. What is the ATCF rate of return for a machine that cost 100,000, lasts for...

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Finance

1. What is the ATCF rate of return for a machine that cost100,000, lasts for 5 years, has zero salvage value, is classifiedas 3 year MACRS property, produces net revenues after deductingdirect and indirect expenses but not depreciation of 26,000 in year1, 42,000 in years 2 to 4, and 14,000 in year 5 using a tax rate of21.00%.   

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4.4 Ratings (807 Votes)
The rate of return is 1739First we compute the Operating cash flows each yearOCFMACRS 5    See Answer
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1. What is the ATCF rate of return for a machine that cost100,000, lasts for 5 years, has zero salvage value, is classifiedas 3 year MACRS property, produces net revenues after deductingdirect and indirect expenses but not depreciation of 26,000 in year1, 42,000 in years 2 to 4, and 14,000 in year 5 using a tax rate of21.00%.   

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