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The next three questions are based on the following information. Tammy is negotiating for the purchase of equipment that would cost $10,000 with the expectation
The next three questions are based on the following information. Tammy is negotiating for the purchase of equipment that would cost $10,000 with the expectation that could earn cash flows of $2,500 for 8 years. Tammy's predetermined minimum desired rate of return is 6%. Tammy plans to depreciate the equipment straight line method over 8 years of service life, with zero salvage value. The tax rate is 40%. The present value of an annuity of 1 at 6% for 8 periods is below. Compute the payback period before tax Compute the payback period after tax Compute the discounted payback period
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