A project will require the investment of $108,000
Chapter , Problem 12-26(choose chapter or problem)
A project will require the investment of $108,000 inequipment (sum-of-years-digits depreciation witha depreciable life of 8 years and zero salvage value)and $25,000 in raw materials (not depreciable).The annual project income after all expenses exceptdepreciation have been paid is projected to be$24,000. At the end of 8 years the project will bediscontinued and the $25,000 investment in rawmaterials will be recovered.Assume a 34% combined income tax rate forthis corporation. The corporation wants a 15%after-tax rate of return on its investments. Deter-mine by present worth analysis whether this projectshould be undertaken
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