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Problem 1: A store considers installing an automated system to increase its projected revenues by $20,000 per year over the next 5 years. Annual expenses
Problem 1: A store considers installing an automated system to increase its projected revenues by $20,000 per year over the next 5 years. Annual expenses to maintain the system are expected to be $5,000. The system will have no market value at the end of its 5-year life, and it will be depreciated by the SL method. The store's effective income tax rate is 40%, and the after-tax MARR is 12% per year. What is the maximum amount that is justified for the purchase of this system? You may need the following to solve the problem: (P/A,12%,5)=3.6048 A
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