What are the annual net cash flows

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The management of Maverick Equipment Company is planning to purchase a new extruder that will cost $175,000 installed. The old machine has been fully depreciated, but can be sold for $18,000. The new machine will be depreciated on a straight line basis over its 10 year economic life to an estimated salvage of $10,000. If the machine will save Maverick $30,000 a year in production expenses, what are the annual net cash flows associated with the purchase of this machine? Assume a marginal tax rate of 40%.

Reference no: EM13929478

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