Question
Global Mining Company is planning to purchase a new mining equipment. With the trade-in of an old equipment that has a salvage value of $30000,
Global Mining Company is planning to purchase a new mining equipment. With the trade-in of an old equipment that has a salvage value of $30000, the new equipment costs $105000. The company plans to use the new equipment for 6 years and then sell it at the price of 45000. During the years that this equipment is in production, it is expected to generate annual gross revenue of $55000. The annual expenses required is $15000. This equipment only qualifies for ADS depreciation and the company's effective income tax rate is 25%. The company's after-tax MARR is 12%. You are tasked to evaluate this project. Please identify the after-tax cash flow in year 6.
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