8 years ago, a new machine cost $7 million to purchase and an additional $460,000 for the installation. The machine was to be linearly depreciated to zero over 20 years.
The company has just sold the machine for $4.2 million, and its marginal tax rate is 25%.
Part 1
What is the annual depreciation?
Annual depr = (purchase price+installation cost)/total life | |
= (7000000+460000)/20 | |
= 373000 |
8 years ago, a new machine cost $7 million to purchase and an additional $460,000 for...
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