using a 40 percent tax rate an 8-4. A new investment in inventory being considered...
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using a 40 percent tax rate an 8-4. A new investment in inventory being considered by Quincy Corporation requires an initial outlay of $100,000 on January 1, year 1. The inventory is expected to be liquidated at the end of 5 years for $80,000. At a 40 per. cent income tax rate and a 10 percent required return, is the investment attractive? This investment is expected to generate the following additional rey- enues and expenses: YEAR 2 3 5 Revenues Expenses Liquidation loss $6,000 $3,000 $10,000 $5,000 $28,000 $14,000 $38,000 $19,000 $25,000 $19,000 $20,000
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