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Will give full stars to the correct answer with breakdown of equations used. Thank you Your company has purchased equipment (for $51,000) that will reduce
Will give full stars to the correct answer with breakdown of equations used. Thank you
Your company has purchased equipment (for $51,000) that will reduce materials and labor costs by $14,000 each year for N years. After N years, there will be no further need for the machine, and because the machine is specially designed, it will have no MV at any time. The IRS, however, has ruled that you must depreciate the equipment on a SL basis with a tax life of six years. If the effective income tax rate is 42%, what is the minimum number of years your firm must operate the equipment to earn 12% per year after taxes on its investment? Your firm must operate the equipment for minimum years to earn 12% per year after taxes on its investment. (Round to the nearest whole number.)Step by Step Solution
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