Duffy, Incorporated is considering the purchase of a new machine costing $720,000. The machine's useful...
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Accounting
Duffy, Incorporated is considering the purchase of a new machine costing $ The machine's useful life is expected to be years with no salvage value. The straightline depreciation method will be used. The net increase in annual aftertax cash flow is expected to be $ Rooney estimates its cost of capital to be The present value of a $ annuity for years at is and the present value of $ to be received in years is
The companys management team is concerned that employee estimates of future cash flows from the new machine may be overly optimistic. To what dollar amount can the annual aftertax cash flow fall before the investment in the new machine should be rejected?
Note: Round your answer to the nearest whole dollar.
What is the expected rate of return on average investment of the machine?
Note: Round your answer to one decimal point
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