Question: Your team is evaluating a project in which its fixed assets would cost $750,000 and be depreciated straight-line over five years to $0 book value.

Your team is evaluating a project in which its fixed assets would cost $750,000 and be depreciated straight-line over five years to $0 book value. You estimate $45,000 in yearly after-tax operating costs. The required return is 15.0 percent, and the firm pays a 21.0 percent tax rate. What is the equivalent annual cost of this project?

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