Nguyen Inc. is considering the purchase of a new computer system (ICX) for $180,000. The system will require an additional $20,000 for installation. If the new computer is purchased it will replace an old system that has been fully depreciated. The new system will be depreciated over a period of 10 years using straight-line depreciation. If the ICX is purchased, the old system will be sold for $20,000. The ICX system, which has a useful life of 10 years, is expected to increase revenues by $33,000 per year over its useful life. Operating costs are expected to decrease by $1,000 per year over the life of the system. The firm is taxed at a 40 percent marginal rate. Round your answers to the nearest dollar.
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Nguyen Inc. is considering the purchase of a new computer system (ICX) for $180,000. The system...
Nguyen Inc. is considering the purchase of a new computer system (ICX) for $180,000. The system will require an additional $40,000 for installation. If the new computer is purchased it will replace an old system that has been fully depreciated. The new system will be depreciated over a period of 8 years using straight-line depreciation. If the ICX is purchased, the old system will be sold for $10,000. The ICX system, which has a useful life of 8 years, is...
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