The purchase of new injection molding equipment (MACRS-GDS 3 year property) costs $125,000 and has...
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Accounting
The purchase of new injection molding equipment (MACRS-GDS 3 year property) costs $125,000 and has a planned salvage value of $13,000 after a useful life of 4 years. The tool generates net revenue (CFBT) of $43,000 per year. The total effective corporate tax rate is 21 percent. After three years, plans changed and the company sold the machine at the end of the year for $30,000. A partial view of the analysis is shown below. What is E, the CFAT (Cash Flow After Taxes) for year 3? Where CFBT = Cash Flow Before Tax; Depr = Depreciation; TI= Taxable Income; Tax = Tax; CFAT = Cash Flow After Tax; PWofCFAT = Present Worth of Cash Flow After Tax
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