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Erickson Corporation is considering abandoning a product line with no debt. The line could be sold for $300,000 after taxes, or it could be kept
Erickson Corporation is considering abandoning a product line with no debt. The line could be sold for $300,000 after taxes, or it could be kept and it will produce after-tax cash flows of $130,000 for each of 3 years. In addition, the possibility of modernizing the line with after-tax cash consequences solely for the modernization are as follows: 0 $30,000 $40,000 $20,000 $60,000 1 2 3 Should Erickson keep, abandon or modernize if the discount rate is 11%
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