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12-ABC Corp. is considering the purchase of a new piece of equipment which costs $11,000. This equipment will have a five-year useful life and have
12-ABC Corp. is considering the purchase of a new piece of equipment which costs $11,000. This equipment will have a five-year useful life and have a salvage value of $1,000 at the end of the five-year period. The marginal tax rate is 30% and the average tax rate is 20%. Assume a straight-line depreciation, the net effect of Year 1 depreciation on Year 1 free cash flow is $_____.
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