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Question 9 1 pts Westcal has approved a project 5 years ago and the project still has 20 years of remaining life today. The management
Question 9 1 pts Westcal has approved a project 5 years ago and the project still has 20 years of remaining life today. The management replaced the old equipment with a new equipment today. The old equipment was purchased 5 years ago at a cost of $45 million and was assumed to have no value at the end of its 25-year life. The new equipment costs $60 million and is assumed to have no value at the end of the project. The firm uses straight-line depreciation. The new equipment decreases Operating Expenses by $5 million per year, since the new equipment is energy-efficient. The marginal tax rate is 35%. If the firm replaces the old equipment now, free cash flows for the next year will Time Altem 17 Mi increase by 53.56 million increase by $3.82 million o o Increase by $3.67 million decrease by $3.45 million decrease by $3.96 million Previous Next
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