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Because of your financial wizard status, you've been asked to evaluate the proposed acquisition of new equipment The price of the equipment is $400,000 and

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Because of your financial wizard status, you've been asked to evaluate the proposed acquisition of new equipment The price of the equipment is $400,000 and it is expected to cost another $75,000 to modify it for use by the firm. The equipment, Which falls into the MACRS three-year class, is expected to be sold after three years for $60,000. The MACRS rates for the first three years are .3333, .4445, and. 1481. Use of the equipment is expected to require an increase in net working capital of $10,000 in year 0 but will be recovered when it is sold. The new equipment will allow the firm to increase its revenues by an estimated $90,000 and is expected to save the firmi\&40,000 per year in before tax operating costs, mainly labor. The firm's marginal federal plus state tax rate is 40%. What is Net Cash Flow for Year 0? $485,000 $410,000 $475,000 $400,000 None of these is correct

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