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The Hess Environmental Center has a seven year contract with the state government to reduce the level of pollutants in the Huron River. The following
The Hess Environmental Center has a seven year contract with the state government to reduce the level of pollutants in the Huron River. The following data items are associated with the work needed for this Contract Cost of special equipment needed now $500.000 Initial supply of lubricants 90.000 Net annual operating cash inflows 150.000 Salvage value of the equipment in seven years 25.000 The special equipment is in the five-year property dass. The tax rate is 30% for ordinary income and 15% for capital gains. Hess's after tax cost of capital is 16% The present value of the after tax ne annual operating cash inflows is 105.785 5024049 $181.75 5514917 Question 2 of 40 wowowother out
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