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Nokela Industries purchases a $43.2 million cyclo-converter. The cyclo-converter will bedepreciated by $10.8 million per year over four years, starting thisyear. Suppose Nekelas tax rate

Nokela Industries purchases a $43.2 million cyclo-converter. The cyclo-converter will bedepreciated by $10.8 million per year over four years, starting thisyear. Suppose Nekelas tax rate is 40%.

a. What impact will the cost of the purchase have on earnings foreach of the four years? (increase or decrease and by how much) b. What impact will the cost of the purchase have on thefirms cash flow in year 1?(_____ million)

Year 2 of the four? (______ million)

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