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The bread company is planning to purchase a new machin which it will depreciate on a straigh-line basis over a 10 year period. A full years depreciation will be take in the year of acquisition. The machine is expected to produce cash flow from operations, net of income taxes, of $3,000 i each of the 10 years. The accounting (book value) rate of return is expected to be 10% on the initial increase in required investment. The cost of the new machine will be:
a:$15,000
b:$30,000
c:$13,000
d$12,000
The correct answer is A, can someone explain to me how to do this problem…
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Viewing 6 replies - 1 through 6 (of 6 total)
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