Question
Johnson Wholesale Corporation has purchased a new piece of equipment for $644,000, with $46,000 of that total being costs for installation. After discussions with its
Johnson Wholesale Corporation has purchased a new piece of equipment for $644,000, with $46,000 of that total being costs for installation. After discussions with its accounting firm the company plans to depreciate the installation costs straight-line over 5 years. The cost of capital is 7.5% and the Tax Rate is 22%. Rounded to the nearest dollar, what is the present value of the cost of the equipment?
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Management and Cost Accounting
Authors: Colin Drury
8th edition
978-1408041802, 1408041804, 978-1408048566, 1408048566, 978-1408093887
