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The president of Real Time Inc has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $38 000, and

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The president of Real Time Inc has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $38 000, and it falls into the MACRS 3 year class Purchase of the computer would require an increase in not working capital of $2.000 The computer would increase the firm's before tax revenues by $20.000 per year but would also increase operating costs by 55,000 per year. The computer is expected to be used for 5 years and then be sold for $14.000 The firm's marginal tax rate is 40 percent, and the project's cost of capital is 14 percent Question 13 (1 point) Saved What is the net investment required at t = 0? A) -$42.000 B) -$40,000 OC) $38,600 D) -$37,600 E-4366

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