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Nokela Industries purchases a $35.5 million cyclo-converter. The cyclo-converter will be depreciated by $5.92 million per year over 6 years, starting this year. Suppose Nokela's
Nokela Industries purchases a $35.5 million cyclo-converter. The cyclo-converter will be depreciated by $5.92 million per year over 6 years, starting this year. Suppose Nokela's tax rate is 35%. a. What impact will the cost of the purchase have on earnings for each of the next 6 years? b. What impact will the cost of the purchase have on the firm's cash flow for the next 6 years? a. What impact will the cost of the purchase have on earnings for each of the next 6 years? The impact on earnings will be & million each year for 6 years. (Round to two decimal places. Use a negative sign for a decrease in value.) b. What impact will the cost of the purchase have on the firm's cash flow for the next 6 years? The impact on the firm's cash flow in Year 1 is $ million. (Round to two decimal places. Use a negative sign for a decrease in value.) The impact on the firm's cash flow in years 2 through 6 is $ million. (Round to two decimal places.)
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