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Please answer it without using excel. company is about to invest $5,000,000 to purchase a piece of equipment which will generate $750,000 of profit (before
Please answer it without using excel.
company is about to invest $5,000,000 to purchase a piece of equipment which will generate $750,000 of profit (before taxes and expenses) for each of the next 10 years. At the end of each year, operating and maintenance costs total $100,000. At the end of these 10 years, the equipment will be sold (salvaged) for $500,000. If the companys tax rate is 45%:
Calculate the EUAC, using an interest rate of 10% and straight line depreciation. Be sure to state whether this represents an annual cost or an annual profit.
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