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Purchase of a new piece of equipment

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DataPoint Engineering is considering the purchase of a new piece of equipment for $370,000. It has an eight-year midpoint of its asset depreciation range (ADR). It will require an additional initial investment of $190,000 in nondepreciable working capital. $67,000 of this investment will be recovered after the sixth year and will provide additional cash flow for that year. Income before depreciation and taxes for the next six are shown in the following table.

Reference no: EM132611832

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Purchase of a new piece of equipment : DataPoint Engineering is considering the purchase of a new piece of equipment for $370,000. It has an eight-year midpoint of its asset depreciation range
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