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What is the amount of net income

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Question - Build Corporation wants to purchase a new machine for $287,000. Management predicts that the machine can produce sales of $216,000 each year for the next 8 years. Expenses are expected to include direct materials, direct labor, and factory overhead (excluding depreciation) totaling $73,000 per year. The firm uses straight-line depreciation with no residual value for all depreciable assets. Build's combined income tax rate is 20%. Management requires a minimum after-tax rate of return of 10% on all investments.

Required - What is the amount of net income (after taxes) in Year 2 of the investment?

Reference no: EM133166916

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