Equipment costing-what is the annual net income

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Outdoor Gear is purchasing equipment costing $1.2 million that will lower manufacturing costs by $280,000 a year. The equipment will be depreciated over years using straight-line depreciation to a book value of zero. After 7 years, the equipment will be worthless. The discount rate is 14 percent and the tax rate is 35 percent. What is the annual net income?

Reference no: EM13826365

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