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You are analyzing the purchase of new equipment. Since you are not an expert on this type of equipment, you hire a consulting firm to
You are analyzing the purchase of new equipment. Since you are not an expert on this type of equipment, you hire a consulting firm to make recommendations. The consultant charged you $ and recommended the purchase of the latest model from HiFlex of America. The equipment costs $ and it will cost another $ to modify it for special use by your firm. The equipment will be fully depreciated on a straightline basis over years. You expect the equipment will be sold after years for $ Use of the equipment will require an increase in your company's net working capital of $ but this $ will be recovered at the end of year The use of the equipment will have no effect on revenues, but it is expected to save the firm $ per year in beforetax operating costs. Your company's marginal tax rate is What is the terminal cash flow for this project, to the nearest dollar?
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