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A company is considering replacing a machine. The machine was purchased 6 years ago for \$80,000 and has been depreciating over an 8-year life. The old machine will be sold for a market value of \$14,500. The new machine costs \$55,000. Assuming the tax rate of 28%, calculate the initial outlay.

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#### Solution Preview

A company is considering replacing a machine. The machine was purchased 6 years ago for \$80,000 and has been depreciated straight line over an 8-year life. The old machine will be sold for a market value of \$14,500. The new machine costs \$55,000. Assuming the tax rate of 28%, calculate the initial outlay.

Initial Investments in New Equipment

Fixed ...

#### Solution Summary

The new machine costs \$55,000. Assuming the tax rate of 28%, calculate the initial outlay. Solution helps in computing initial outlay.

\$2.49