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Mom's Cookes; inc., is considering the puichase of a new cookie oven. The otiginal cost of the ofd oven was $46,000, it is now five
Mom's Cookes; inc., is considering the puichase of a new cookie oven. The otiginal cost of the ofd oven was $46,000, it is now five years old, and it has a current market value of $20,500. The old oven is being depreciated over a 10 year life toward a zero estimatec old oven can be used foc sox moreyears but has no market valie after its depreclable ife is over. Management is contemplating the purchase of a new oven whose cost 6$26.000 and whose estimated salvate value is zero Expected before tax cash savings from the new oveh are $3.700 a year aver its life, you can use bonus deprectaton on the oven, and the cost of capital is 10 percent. Assurne a zi percent tar tate What will the cast llows for this project be? (Note thot the $40,000 cost of the old oven is deprecioted over ten yeors ot $4,600 per yeor. The halfyear convention is not used for the old oven. Negative omounts should be indicated by a minus sign. Do not round intermediate colcutbtions ond reund your answers to 2 decimel ploces.)
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