Question
Modified ACRS Depreciation Allowances (Table 10.7) Year Three-Year Five-Year Seven-Year 1 33.33% 20.00% 14.29% 2 44.45...
| Modified ACRS Depreciation Allowances (Table 10.7) | |||
| Year | Three-Year | Five-Year | Seven-Year |
| 1 | 33.33% | 20.00% | 14.29% |
| 2 | 44.45 | 32.00 | 24.49 |
| 3 | 14.81 | 19.20 | 17.49 |
| 4 | 7.41 | 11.52 | 12.49 |
| 5 | 11.52 | 8.93 | |
| 6 | 5.76 | 8.92 | |
| 7 | 8.93 | ||
| 8 | 4.46 |
||
Please give a detailed step by step description so that I can follow along with the solution
Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $588209 is estimated to result in $187762 in annual pretax cost savings. The press falls in the MACRS five-year class, and it will have a salvage value at the end of the project of $98015. The shop's tax rate is 29 percent. What is the OCF for year 4?
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