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A firm plans to build a plant on land it owns. The firm paid $200,000 for the land 30 years ago. Its current market value
A firm plans to build a plant on land it owns. The firm paid $200,000 for the land 30 years ago. Its current market value is $2,000,000. Construction costs, including machinery, will require an initial outlay of $20,000,000. The project will create sales of $12,000,000 per year for years 110. No change in other operating costs is expected. The firm uses straight line depreciation over the 10 year life of the project. Salvage value is $1,000,000. The tax rate is 40%. 23. The initial investment is $ $24,000,000 $24,200,000 $23,000,000 $22,000,000 $22,200,000
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