Please help with number 3 and be very specific.. I need to understand where the...
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Please help with number 3 and be very specific.. I need to understand where the numbers are coming from. Those who have answered this question for others on here have not been specific and have just thrown random numbers in there without any explanation which does not help me try to do and understand the problem. thanks!
Problem 1 The latest manufacturing equipment is purchased at a cost of $800,000. As a result, annual cash revenues are expected to increase by $345,000; annual cash expenses are expected to increase by $162,000; straight-line depreciation is used; the asset has a seven-year life; the salvage value is $100,000. Assume the company is in the new 21% corporate tax bracket. 1. Determine the accounting rate of return? (round to the nearest %) 2. Determine the payback period? 3. Determine the NPV assuming a minimum required rate of return of 8%
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