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I will have this liked! thank you Thermostate has approved a project 10 years ago and the project still has 15 years of remaining life
I will have this liked! thank you
Thermostate has approved a project 10 years ago and the project still has 15 years of remaining life today. The management replaced the old equipment with a new equipment today. The old equipment was purchased 10 years ago at a cost of $30 million and was assumed to have no value at the end of its 25-year life. The new equipment costs $45 million and is assumed to have no value at the end of the project. The firm uses straight-line depreciation. The new equipment decreases Operating Expenses by $7 million per year, since the new equipment is energy-efficient. The marginal tax rate is 35%. If the firm replaces the old equipment now, free cash flows for the next year will increase by $5.18 million Increase by $5.59 million decrease by $4.87 million increase by $4.92 million decrease by $5.49 millionStep by Step Solution
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