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Mountain West Corporation acquires a depreciable asset at a cost of $30,000. The assets cost will be recovered as follows: $10,000 at year 0, $10,000

Mountain West Corporation acquires a depreciable asset at a cost of $30,000. The assets cost will be recovered as follows: $10,000 at year 0, $10,000 at the end of year 1, and $10,000 at the end of year 2. They have a marginal tax rate of 25% and a discount rate of 7%. Calculate the net present value after-tax cost of this purchase. (The present value of a $1 at a 7% discount rate at the end of year 1 is .935. The present value of a $1 at a 7% discount rate at the end of year 2 is .873.

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