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Can you please answerr the question? Question 7: Marks = 10 + 10 = 20 marks The Green Box Co. is considering buying special equipment,
Can you please answerr the question?
Question 7: Marks = 10 + 10 = 20 marks The Green Box Co. is considering buying special equipment, with an economic life of 8 years, for $200,000. The annual pre-tax cash flow generated by the equipment is expected to be $40,000. Assume a tax rate of 50% (tax paid in year incurred) and a discounting rate of 15%. (a) Show after tax cash flow of the project assuming straight line depreciation, (b) Should the firm buy the equipment? Support yourStep by Step Solution
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