The munsell colour company is considering the purchase of a


The Munsell Colour Company is considering the purchase of a new batch polymerminusbonding machine for producing its number one line of crayons. Although the machine being considered will not produce any increase in sales? revenues, it will result in the beforeminustax reduction of labour costs by? $200,000 per year. The machine has a purchase price of? $250,000, and it would cost an additional? $10,000 to install the machine. In? addition, to operate this? machine,inventory must be increased by? $15,000. The machine is categorized as 10minusyear property. After 2? years, it can be sold for? $150,000. The tax rate is? 34% and the cost of capital is? 15%. What are the operating cash flows at the end of Year? 1?

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Financial Management: The munsell colour company is considering the purchase of a
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