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4. Company wants to buy equipment for $20k Equipment has 7 yr. Economic life Will be depreciated by straight-line method fully Will produce 10k units

4.

Company wants to buy equipment for $20k

Equipment has 7 yr. Economic life

Will be depreciated by straight-line method fully

Will produce 10k units

Unit cost is $3 including labor and priced at $4.5

Discount rate=18%, tax rate= 21%.

Should company buy equipment?

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