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Unformatted text preview: used. A yearly maintenance cost for the machine will be $300. The equipment is expected to be used for three years and then sold for $3,000. The machine is expected to provide $6,000 a year in cash vacuum cleaner use and increase car wash cash sales by $10,000 a year. Electricity cost for the use of the vacuum will be $400 a year and increased costs for the increased car wash revenue will be $1,600 a year. The companys cost of capital is 8% and the tax rate is 20%. Determine if the company should acquire this piece of equipment....
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- Spring '11