Question

The base price is $120,000, and shipping and installation costs would add another $15,000. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $70,000 what is the initial year 0 cash flow for the milling machine

Answer 1

Answer:

$-135,000

Explanation:

The year 0 cash flow is the cost of the machine

Total cost of the machine = base price + shipping and installation costs

$-120,000 + $-15,000 = $-135,000