Order the answer to: The Quick Manufacturing Company, a large

Assignment Help business-economics Order the answer to: The Quick Manufacturing Company, a large

business-economics

Order the answer to: The Quick Manufacturing Company, a large

Question The Quick Manufacturing Company, a large profitable corporation, is considering the replacement of a production machine tool. A new machine would cost $3700, have a 4-year useful and depreciable life, and have no . For tax purposes, sum of- years’-digits would be used. The existing machine tool was purchased 4 years ago at a cost of $4000 and has been depreciated by straight line assuming an 8-year life and no . The tool could be sold now to a used equipment dealer for $1000 or be kept in service for another 4 years. It would then have no . The new machine tool would save about $900 per year in operating costs compared to the existing machine. Assume a 40% combined state and federal tax rate. (a) Compute the before-tax rate of return on the replacement proposal of installing the new machine rather than keeping the existing machine. (b) Compute the after-tax rate of return on this replacement proposal.
Subject business-economics
Ready to try a high quality writing service? Get a discount here