Hurzdan, Inc., is considering the purchase of a $ 3 6 2 , 0 0 0 computer
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Question:
Hurzdan, Inc., is considering the purchase of a $ computer with an economic life of four years. The computer will be fully depreciated over four years using the straightline method. The market value of the computer will be $ in four years. The computer will replace four office employees whose combined annual salaries are $ The machine will also immediately lower the firms required net working capital by $ This amount of net working capital will need to be replaced once the machine is sold. The corporate tax rate is percent. The appropriate discount rate is percent.
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