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Business, 05.05.2020 05:32 tdahna0403

Expected before-tax cash savings from the new oven are $4,000 a year over its full MACRS depreciable life. Depreciation is computed using MACRS over a 5-year life, and the cost of capital is 10%. The applicable depreciation rates are 0.20, 0.32, 0.19, 0.12, 0.11, and 0.06. Assume a 40% tax rate. What is the initial cash flow (t=0) for this replacement analysis?

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