Gillespie Gold Products Inc. is considering the purchase of new smelting equipment. The new equipment is...
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Gillespie Gold Products Inc. is considering the purchase of new smelting equipment. The new equipment is expected to increase production and decrease costs with a resulting increase in profits. The equipment under consideration is summarized below. Determine the after-tax cash flow using a tax rate of 42% and sum-of-the-years-digits depreciation. Cost Net Savings/year Depreciable Life Actual Useful Life Salvage Value $50,000 15,000 the first year decreasing by $1,000 each year thereafter 4 yrs 6 yrs 4,000 Gillespie Gold Products Inc. is considering the purchase of new smelting equipment. The new equipment is expected to increase production and decrease costs with a resulting increase in profits. The equipment under consideration is summarized below. Determine the after-tax cash flow using a tax rate of 42% and sum-of-the-years-digits depreciation. Cost Net Savings/year Depreciable Life Actual Useful Life Salvage Value $50,000 15,000 the first year decreasing by $1,000 each year thereafter 4 yrs 6 yrs 4,000
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Related Book For
Financial Analysis with Microsoft Excel
ISBN: 978-1285432274
7th edition
Authors: Timothy R. Mayes, Todd M. Shank
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