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Oregon Forest Products will acquire new equipmeot that falls under the five-year MACRS category. The cost is $480.000. If the equipment is purchased, the following
Oregon Forest Products will acquire new equipmeot that falls under the five-year MACRS category. The cost is $480.000. If the equipment is purchased, the following earnings before depreciation and taxes will be generated for the next six years. Use Table 12-12. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. The firm is in a 25 percent tax bracket and has a 13 percent cost of copital. a. Calculate the net present value Note: A negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole dollar amount. Table 12-12 Depreciation nercentaes (exnressed in decimals) Tresent value of 51,PV2Y XV=FV[1/(I+y]
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