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Question 4 Homework Unanswered Supper Corp. is evaluating new equipment that will cost $300,000. The new equipment will provide the company with annual before-tax savings
Question 4 Homework Unanswered Supper Corp. is evaluating new equipment that will cost $300,000. The new equipment will provide the company with annual before-tax savings of $110,000 for the next five years. The company can depreciate the asset at a CCA rate of 30%. The marginal corporate tax rate is 35% and the required rate of return is 10%. Should the company invest in this new equipment? The salvage value at the end of five years is zero. Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Yes, the company should invest in the new equipment as the NPV is $21,571.59. b Yes, the company should invest in the new equipment as the NPV is $46,211.70. Yes, the company should invest in the new equipment as the NPV is $271,041.25. d No, the company should not invest in the new equipment as the NPV is -$28,958.75. e No, the company should not invest in the new equipment as the NPV is -$53,598.86 Unanswered . 1 attempt left Submit
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