Solution-Given the following information what is the

Given the following information what is the effective cost

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Reference no: EM13479466

Given the following information, what is the effective cost of the new machine; that is, what is the cash flow at t = 0?

Purchase price of new machine	$8,000
Installation charge	2,000
Market value of old machine	2,000
Book value of old machine	1,000
Inventory decrease if new machine is installed	1,000
Accounts payable increase if new machine is installed	500
Tax rate	48%
Cost of capital	15%

Reference no: EM13479466

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Given the following information what is the effective cost

Reference no: EM13479466

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