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3 You are analyzing the purchase of new equipment, Since you are not an expert on this fype of equipment, you hire a consulting firm
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You are analyzing the purchase of new equipment, Since you are not an expert on this fype of equipment, you hire a consulting firm to make recommendations. The consultant charged you $2514 and recommended the purchase of the latest model from ACME Corp. of America. The equipment costs $71649, and it will cost another 59315 to modify it for special use by your firm. The equipment will be depreciated on a straighe-line basis over 6 years with no sakage value. You expect the equipment will be sold after 4 years for $25006. Use of the equipment will require an increase in your company's net working capital of $7089, but it will be recovered at the end of year 4. The use of the equipment will have no effect on revenues. but it is expected to save the firm $49840 per year in before-tax operating costs. Your company's marginal tax rate is 28%. What is the operating free cash flow in the first year of the project. to the nearest doliar Step by Step Solution
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