YZ Company currently uses four machines to produce 400,000 units annually. The machines were bought three years ago for USD 50,000 each and have an expected useful life of 10 years with no salvage value. These machines cost a total of USD 30,000 per year to repair and maintain. The company is considering replacing the four machines with one technologically superior machine capable of producing 400,000 units annually by itself. The machine would cost USD 140,000 and have an estimated useful life of seven years with no salvage value. Annual repair and maintenance costs are estimated at USD 14,000. Assuming straight-line depreciation and a 40 per cent tax rate, determine the annual additional after-tax net cash inflow if the n
XYZ Company currently uses four machines to produce 400,000 units annually. The machines were bought three years ago for USD 50,000 each and have an expected useful life of 10 years with no salvage value. These machines cost a total of USD 30,000 per year to repair and maintain. The company is considering replacing the four machines with one technologically superior machine capable of producing 400,000 units annually by itself. The machine would cost USD 140,000 and have an estimated useful life of seven years with no salvage value. Annual repair and maintenance costs are estimated at USD 14,000. Assuming straight-line
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