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Your company is considering a purchase of a software which, along with the systems require a capital expenditure today of $15,245. The software purchase will
Your company is considering a purchase of a software which, along with the systems require a capital expenditure today of $15,245. The software purchase will be depreciated over five years on a straight line basis, with the first depreciation charge occuring one year from now. It is expected that the software will increase inventory by $2,039 one year from now. Additional annual revenues of $29,365, are expected, abd there will be an annual cost (excluding depreciation) of $12,129 to run the system. If the company's tax rate is 34% what is the incremental free cash flow for the software one year from now?
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