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How do we get to the correct answer? Here, we're contemplating a new automatic surveillance system to replace our current contract security system. It will
How do we get to the correct answer?
Here, we're contemplating a new automatic surveillance system to replace our current contract security system. It will cost $450,000 to get the new system. The cost will be depreciated straight-line to zero over the system's four-year expected life. The system is expected to be worth $250,000 at the end of four years. We think the new system will save us $125,000, before taxes, per year in contract security costs. The tax rate is 34 percent. The required return is 17 percent. Create a projected cash flow model. EBIT for Year 1 is $ Selected Answer: Correct Answer: 987654321 12,500Step by Step Solution
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