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Granny's Butter and Egg Business is such that she pays an effective tax rate of 35%. Granny is considering the purchase of a new Throb
Granny's Butter and Egg Business is such that she pays an effective tax rate of 35%. Granny is considering the purchase of a new Throb Churn for $25,000. This churn is a special handling device for food manufacture and has an estimated life of 4 years and a salvage value of $5000. The new churn is expected to increase net income by $8000 per year for each of the 4 years of use. If Granny works with an after-tax MARR of 10% and uses 3 years MACRS depreciation, should she buy the churn?
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