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The Terme Corporation is contemplating the purchase of new equipment, which may potentially increase revenues by 25%. Currently, sales are $790,000 per year and
The Terme Corporation is contemplating the purchase of new equipment, which may potentially increase revenues by 25%. Currently, sales are $790,000 per year and cost of sales are 60% of sales. The equipment is expected to last for 6 years with no residual value. The cash outflow expected at the beginning of the year is $431,400. Ignoring income taxes, what is the estimated annual net operating income increase/decrease?
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