A firm is considering the following

Chapter , Problem 12-21

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A firm is considering the following investmentproject:Before-TaxCash FlowYear (thousands)0$10001 5002 3403 2444 1005?100125 Salvage value?The project has a 5-year useful life with a $125,000salvage value, as shown. Double declining balancedepreciation will be used, assuming the $125,000salvagevalue. The combined income tax rate is 34%.If the firm requires a 10% after-tax rate of return,should the project be undertaken?

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