Ellsmere corporation plans to purchase a new machine for, Ask an Expert

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Ellsmere Corporation plans to purchase a new machine for $50,000, which will save company $12,000 annually. Ellsmere will depreciate machine on ACRS with 3 year life, the annual depreciation being 29%, 47%, and 24%. The machine will run for five years, and then Ellsmere will sell it for $5,000. The company will employ 8% as discount rate and its tax rate is 40%. Should Ellsmere purchase the machine?

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Category:- Statistics and Probability
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