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10. Hunter's Paradise purchases $568,000 of equipment today. The equipment is being depreciated straight-line over 20 years to zero. The firm is selling this equipment

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10. Hunter's Paradise purchases $568,000 of equipment today. The equipment is being depreciated straight-line over 20 years to zero. The firm is selling this equipment at the end of 5 years for $490,000. Hunter's Paradise realizes a capital gain on the sale and must pay capital gains taxes. What is the after-tax cash flow (after-tax salvage value) from this sale if the tax rate is 21 percent? (8 points) 11. Soft and Cuddly is considering a new toy that will produce the following cash flows. Should the company produce this toy if the firm requires a 15 percent rate of return? Assume that Soft and Cuddly use only the intemal rate of return method when it makes capital budgeting decisions. ( 8 points)

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