The Able Corporation is considering the installa-tion of a
Chapter , Problem 12-60(choose chapter or problem)
The Able Corporation is considering the installa-tion of a small electronic testing device for use inconjunction with a government contract the firmhas just won. The testing device will cost $20,000and will have an estimated salvage value of $5000in 5 years when the government contract is fin-ished. The firm will depreciate the instrument bythe sum-of-years-digits method, using 5 years asthe useful life and a $5000 salvage value. Assumethat Able pays 50% federal and state corporateincome taxes and uses 8%after-taxin economicanalysis. What minimum equal annual benefit mustAble obtainbefore taxesin each of the 5 yearsto justify purchasing the electronic testing device?
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