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please solve Stepnosk Corporation is considering a capital budgeting project that would hivolve investing $204,000 in equipment with an estmated usefut ufe of 4 years
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Stepnosk Corporation is considering a capital budgeting project that would hivolve investing $204,000 in equipment with an estmated usefut ufe of 4 years and no savoge value at the end of the useful he. Annuat incremental sales from the project would be $620,000 and the annual incremental casti operating expenses would be $470.000 A one-time renovation expense of $50.000 would be requlted in yesr 3. The project would require investing 514,000 of working capital in the project immediately, but this amount would be recoveted at the end of the project in 4 years. The compamy's income tax rate is 30 sis and its atter tax discount rate is 13%. The company uses straigit line depreciotoc on all equpment. The ncome tax expense in year 3 is: Minigis Craice 116700 $29.700 345000 Step by Step Solution
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