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Your firm is planning to install new equipment for the manufacture of fabricated metal bolts. This equipment has an initial cost of $500,000 and is
Your firm is planning to install new equipment for the manufacture of fabricated metal bolts. This equipment has an initial cost of $500,000 and is expected to generate net income of $140,000 per year for the next 4 years. Using 40% bonus depreciation followed by MACRS depreciation, $30,000 salvage value, a federal tax rate of 21%, a state tax rate of 5.25%, and an after-tax MARR of 9%, determine the net present worth of this investment. | | | | | , , Year Depreciation Before-Tax Cash Flow Taxable Income Year Income Taxes Present Worth After-Tax Cash Flow
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