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months and will partially disrupt production. The firm has just completed a $ 5 0 , 0 0 0 feasibility study to analyze the decision

months and will partially disrupt production. The firm has just completed a $50,000 feasibility study to analyze the decision to buy the xC-750, resulting in the following estimates: expected to be 70% of their sale price. The increased production will require additional inventory on hand of $1.7 million, to be added in year 0 and depleted in year 10.
Human Resources: The expansion will require additional sales and administrative personnel at a cost of $2 million per year. goods sold. Buckingham's marginal corporate tax rate is 34%.
a. Determine the incremental earnings (using CCA ) from the purchase of the xC-750.
b. Determine the free cash flow (including all CCA tax shield effects) from the purchase of the XC-750 for the first 10 years. (Hint: include the impact in year 11.)
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