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Kanga Inc. is considering investing $12 million in computer equipment that is expected to have a useful life of 4 years with no salvage value,
Kanga Inc. is considering investing $12 million in computer equipment that is expected to have a useful life of 4 years with no salvage value, and is expected to reduce the firm's labor costs by $5 million per year. Assume that Kanga Inc. pays a 25% tax rate on accounting profits and uses the straight-line depreciation method. What is the annual after-tax cash flow from the investment in years 1 through 4?
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