Question: Aabbccbdte AaBbCcDdEe an Normal No Spacing You are evaluating a capital budgeting project that should last for 4 years. The project requires $600,000 of equipment
Aabbccbdte AaBbCcDdEe an Normal No Spacing You are evaluating a capital budgeting project that should last for 4 years. The project requires $600,000 of equipment with shipping cost of $20,000. The company will use the MACRS depreciation method. The MACRS depreciation rates are 33, 45, 15, and 7 percent. The new equipment would require $50,000 in working capital. The new equipment would reduce before tax labor cost by $220,000. Tax rate is 40% and WACC is 10%. What is cash flow in year 0 and what is the cash flow in year 1 and 2
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