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Your company has purchased a new piece of equipment with a total acquisition cost of $1,000,000. The expected salvage value is $100,000 at year 20.

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Your company has purchased a new piece of equipment with a total acquisition cost of $1,000,000. The expected salvage value is $100,000 at year 20. Your tax accountants tell you that you can depreciate the acquisition over 8 years Calculate the straight-line depreciation amount for the first year. Calculate the Sum of Digits depreciation amount for cach of the first four years. Explain how this depreciation would affect your l) cash flow. 2) balance sheet and 3) taxable income

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