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Fargo Corp. is considering the purchase of a new piece of equipment. The equipment costs $50,100, and will have a salvage value of $5,100 after
Fargo Corp. is considering the purchase of a new piece of equipment. The equipment costs $50,100, and will have a salvage value of $5,100 after nine years. Using the new piece of 13% equipment wil increase Fargo's annual cash flows by $6,100. Fargo has a hurdle rate of a. How much is Fargo's annual depreciation will on the equipment? b. What is Fargo's projected annual increase in net income? t Income ing rate of return for purchasing the new piece of equipment? (Round your answer to 2 decimal places.) e of Return d. Based on financial factors, should Fargo purchase the new equipment? G) Yes O No
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