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Sears might purchase a forklift for $500,000.They would finance the purchase with a 16%, 4-year loan requiring end -of-year installment payments of $178,690.It would be
Sears might purchase a forklift for $500,000.They would finance the purchase with a 16%, 4-year loan requiring end -of-year installment payments of $178,690.It would be depreciated under MACRS using a 5-year recovery period.The firm would pay $5,000 per year for a service contract that covers all maintenance costs.There is no salvage value.What is the after-tax cost of purchasing
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