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Table 8.4 Cuda Marine Engines, Inc. must develop the relevant cash flows for an expansion capital investment proposal. The proposed asset costs $50,000 and has
Table 8.4 Cuda Marine Engines, Inc. must develop the relevant cash flows for an expansion capital investment proposal. The proposed asset costs $50,000 and has installation costs of $3,000. The asset will be depreciated using a MACRS five-year recovery schedule (20%,32%, 19%, 12% 12%, 5%). The new equipment is expected to result in operating profits before depreciation of $25,000 per year. The firm has a 40 percent tax rate. The annual incremental after-tax cash flow from operations for vear 1 is
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