Homework Answers
Cost of Machine = $120,000
Estimated life = 12 Years
Salvage Value = $12,000
Annual Maintainence Expense = $54,000
Required Rate of Return = 15%
So,
Minimum Annual After tax Net Profit Required = $21723.92
So, Minimum Annual After Tax Revenue = 21723.92 + 54000
Minimum Annual After Tax Revenue = $75,723.92
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