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In year 0 , Jarmex paid $55,000 for an overhaul of a tangible operating asset. Jarmex has a 21 percent marginal tax rate and uses
In year 0 , Jarmex paid $55,000 for an overhaul of a tangible operating asset. Jarmex has a 21 percent marginal tax rate and uses a 7 percent discount rate to compute NPV. Use Appendix A. Required: a. Compute the after-tax cost of the overhaul if Jarmex can deduct the $55,000 payment as a repair in year 0 . b. Compute the after-tax cost of the overhaul if Jarmex must capitalize the $55,000 payment to the asset account and can recover it on a straight-line basis in years 0,1,2, and 3 . Complete this question by entering your answers in the tabs below. Compute the after-tax cost of the overhaul if Jarmex must capitalize the $55,000 payment to the asset account and can recover it on a straight-line basis in years 0,1,2, and 3. Note: Cash outflows and Negative amount should be indicated by a minus sign. Round your intermediate calculations and final answers to the nearest whole dollar amount
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