Silvana zhang of sajjad jafri amp geopeng li limited is, Ask an Expert

Finance

Silvana Zhang of Sajjad Jafri & Geopeng Li Limited is considering purchasing a new widget making machine. She would like to know the maximum price she should pay for the new machine.

1. The new machine will replace the existing machine, which has a current market value of $1,000,000.

2. New machine will reduce before tax operating cost by $300,000 per year for 15 years.

3. The old machine is expected to last for another 10 years and will have a salvage value of $100,000 at the end of 10 years.

4. The new machine is expected to last for 15 years and will have a salvage value of $200,000.

CCA rate is 20%, tax rate is 30%, and the required rate of return is 15%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M9617864

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