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The Target Copy Company is contemplating the replacement of its old printing machine with a new model costing R60.000. The old machine, which originally cost
The Target Copy Company is contemplating the replacement of its old printing machine with a new model costing R60.000. The old machine, which originally cost R40.000 has 6 years of expected life remaining and a current book value of R30.000 versus a current market value of R24.000. Target's corporate tax rate is 40%. If Target sells the old machine at market value, what is the initial after-tax outlay for the new printing machine? 1 R22.800 2 R30.000 3 R33.600 4 R36.000
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