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Al -Huda Inc. want to replace an old asset with a new one. The new asset costs $ 50,000 and has installation costs of $
Al -Huda Inc. want to replace an old asset with a new one. The new asset costs $ 50,000 and has installation costs of $ 3,000. The asset will be depreciated using a 5- year recovery period. The old asset , which originally cost $ 25,000 and will be sold for \$10,000 , has been depreciated using MACRS 5- year recovery period and three years of depreciation have already been taken. The new asset is expected to result in incremental before - tax net profits of $ 5, 000 per year . The firm has a 40 percent tax rate The initial.cashflow equals
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