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Ms . T . Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $ 4 7
Ms T Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $ Of this sum, $
is described by the supplier as an installation cost. Ms Potts does not know whether the company will need to treat this cost as a tax
deductible current expense or as a capital investment. In the latter case, the company could depreciate the $ straightline over
five years.
How will the tax authority's decision affect the aftertax cost of the kiln? The tax rate is and the opportunity cost of capital is
Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.
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