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8.You can purchase an optical scanner today for $400. The scanner provides benefits worth $60 a year.The savings last for the expected life of the scanner which is 10 years. Scanners are expected todecrease in price by 20% per year. Suppose the discount rate is 10%. When is the best purchase time?
II.Cash Flows and Project AnalysisQuestions 1 to 5 refer to the following information. You are an analyst with Smith Securities. One of thecompanies that you follow is Mac Company. Mac Company is considering the purchase of a new 400-tonstamping press. The press costs $500,000. The press will depreciate straight-line to $100,000 over a five-yearlife. The project will generate $250,000 in revenue and $150,000 in costs per year. The press will be sold for$150,000 after five years. An inventory investment of $60,000 is required during the life of the investment. Macis in the 40 percent tax bracket. The cost of capital is 5%.Fixed Cost= $500,000Depreciation= 80,000/year straight-line to$100,000Life= 5 yearsRevenue= $250,000Expense=$150,000Tax rate= 40%Cost of capital= 5%

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