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An investment of $800,000 is made in equipment that qualifies as 3-year equipment for MACRS-GDS depreciation. The equipment generates a net savings of $300,000 per
An investment of $800,000 is made in equipment that qualifies as 3-year equipment for MACRS-GDS depreciation. The equipment generates a net savings of $300,000 per year, and has a $200,000 salvage value at the end of the 5-year planning horizon. A 25% tax rate applies and the after-tax MARR is 8%. Determine the present worth of the after-tax cash flow using MACRS-GDS with 50% bonus depreciation.
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