Outdoor Gear is purchasing equipment costing $485,900 that will lower manufacturing costs by $132,000 a year. The equipment will be depreciated over 8 years using straight-line depreciation to a zero book value. After 8 years, the equipment will be worthless. The discount rate is 16 percent and the tax rate is 34 percent. What is the annual net income from this purchase?

Answer rating: 100% (QA)

To calculate the annual net income from the purchase of the equipment we need to consider the deprec... View the full answer