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Business, 04.12.2019 03:31 UncleE123

Moon bakery company is considering automated baking equipment that costs $500,000 installed and would replace the present hand-made production method. the present equipment has a zero book and salvage value. the new equipment will not increase revenues but will reduce operating costs from a current level of $600,000 to $300,000 per the depreciation of the new equipment will be $73,000 per year. what are the annual incremental net cash flows? assume a marginal tax rate of 40 percent.

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