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Use the inforrnation below for questions ( 9 ) to ( 1 3 ) Market Top Investors, Incorporated, is considering the purchase of a $
Use the inforrnation below for questions to
Market Top Investors, Incorporated, is considering the purchase of a $ computer with an economic life of five years. The computer will be fully depreciated over five years using the straightline method, at which time it will be worth $ Below I arn providing sorne more information about the main characteristics and implications of this project:
The computer will replace two office ernployees whose combined annual salaries are $
The machine will immediately lower the firm's required net working capital by $
The computer will allow the company to undertake a diversified set of projects, that will require an investment in inventory equal to $ and a reduction in accounts receivables towards clients equal to $ for each of the years subsequent to year that is the year when the new computer is bought
Any arnount invested in net working capital will need to be replaced once the machine is sold. The corporate tax rate is percent. The appropriate discount rate is percent.
Compute the Aftertax salvage value of the equipment.
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