Equity corp paid a consultant to study the desirability of, Ask an Expert

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Equity Corp. paid a consultant to study the desirability of installing some new equipment. The consultant recently submitted the following analysis:

Cost of new machine: $100,000
PV of after tax revenues from operations: $90,000
PV of after-tax operating expenses: $20,000
PV of depreciation expenses: $87,500
Consulting fees and expenses: $750

The corporate tax rate is 40%. Should Equity Corp. accept the project?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9977587

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