How much reduction in annual cash operating costs

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Question - Barrick Company has a payback goal of 3 years on new equipment acquisitions.

A new sorter is being evaluated that costs $450,000 and has a 5-year life. Straight-line depreciation will be used; no salvage is anticipated.

Barrick is subject to a 40% income tax rate.

How much reduction in annual cash operating costs must the new equipment generate in order to meet the company's payback goal?

Reference no: EM132903719

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