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Suppose a machine costs $600,000 and requires $80,000 in pre-tax annual operating costs. The machine will be fully depreciated on a straight-line basis over its
Suppose a machine costs $600,000 and requires $80,000 in pre-tax annual operating costs. The machine will be fully depreciated on a straight-line basis over its useful life of 10 years, after which it will have zero salvage value. If the required return is 14% and the tax rate is 22%, then what is the equivalent annual cost of the machine
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