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A proposed cost-saving device has an installed cost of $690,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $40,000, the marginal tax rate is 35 percent, and the project discount rate is 12 percent. The device has an estimated year 5 salvage value of $65,000. What level of pretax cost savings do we require for this project to be profitable?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91731936

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