Expectation is the new chum will increase net income

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Granny Butter and lugs Inc, pay an effective tax rate of 40% Granny is considering the purchase of a new churn for $28,000. this churn is a special handling device for food manufacture and has a savage value of $7,000 at the end of its estimated 4-year life. The expectation is the new chum will increase net income by $9,000 per y ear for each of the four years of use. (Granny utilizes an after-tax MARK of 12% and a present worth analysis, should Granny should purchase the churn? Why?

Reference no: EM131173450

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