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The business has a 40% corporate income tax rate and the straight-line, depreciable life of the equipment to be purchased is five years. You are
The business has a 40% corporate income tax rate and the straight-line, depreciable life of the equipment to be purchased is five years.
You are contemplating buying a machine costing $45000 that will increase sales (after deducting the cost of sales) and result in an increase in sales of $8000 per year for the next 8 years. Assuming a rate of return of 8%, should you purchase the machine?
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