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Helga [31]
3 years ago
12

gluon inc. is considering the purchase of a new high pressure glueball. it can purchase the glueball for $90,000 and sell its ol

d low pressure glueball, which is fully depreciated, for $16,000. the new equipment has a 10-year useful life and will save $20,000 a year in expenses. the opportunity cost of capital is 8%, and the firm's tax rate is 21%. what is the equivalent annual saving from the purchase if gluon can depreciate 100% of the investment immediatley.
Business
1 answer:
Kazeer [188]3 years ago
6 0

Answer:

Explanation:

Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $200,000 and sell its old low-pressure glueball, which is fully depreciated, for $36,000. The new equipment has a 10-year useful life and will save $44,000 a year in expenses. The opportunity cost of capital is 8%

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