Columbia Southern University Operations And Supply Chain Management Assignment Help - finance

Question - Nuff Folding Box Company, Inc. is considering purchasing a new gluing machine. The gluing
machine costs $ 50,000 and requires installation costs of $2,500. This outlay would be partially offset
by the sale of an existing gluer. The existing gluer originally cost $10,000 and is four years old. It is
being depreciated under MACRS using a five-year recovery schedule and can currently be sold for
$150,000. The existing gluer has a remaining useful life of five years. If held until year 5, the existing
machine's market value would be zero. Over its five-year life, the new machine should reduce
operating costs(excluding depreciation) by $17,000 per year. Training costs of employees who will
operate the new machine will be one-time cost of ...Read More $5,000 which should be included in the initial outlay.
The new machine will be depreciated under MACRS using a five-year recovery period. The firm has a
12 percent cost of capital and a 40 percent tax on ordinary income and capital gaind.
The internal rate of return for the project is ?
- greater than 12 percent
-between 7 and 8 percent
- between 10 and 11 percent
- between 9 and 10 percent ...Read Less

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