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What is the appropriate end-of-life cash flow

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Question - Global Industrial Manufacturing (GIM) is analyzing a capital investment proposal for new equipment to produce a product over the next 10 years. The analyst is attempting to determine the appropriate "end-of-life" cash flows for the analysis. At the end of 10 years, the equipment must be removed from the plant and will have a net book value of zero, a tax basis of $375,000, a cost to remove of $200,000, and scrap salvage value of $50,000. GIM's effective tax rate is 40%. What is the appropriate "end-of-life" cash flow related to these items that should be used in the analysis?

Reference no: EM132757088

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