Basic MACRS Application. Sizemore Company is considering an investment opportunity involving a cash outlay of ($ 120,000)

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Basic MACRS Application. Sizemore Company is considering an investment opportunity involving a cash outlay of \(\$ 120,000\) for new office building machinery that would last about ten years and have no estimated residual value. The machinery would reduce annual cash operating costs by \(\$ 25,000\). The firm's tax rate is 40 percent, and its cost of capital is 14 percent. The company considers this asset to be a 7-year asset for MACRS purposes.

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Find the NPV, the payback period, and the approximate IRR.

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Managerial Accounting

ISBN: 9780538842822

9th Edition

Authors: Harold M. Sollenberger, Arnold Schneider, Lane K. Anderson

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