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Question - Aple Pie has a cost-plus-fixed fee contract with the air force to build jets. The government will buy any additional equipment that it needs on a justified cost-savings basis. The incremental tax rate for the company is 25%. The company has computed the following labor savings for a new equipment that costs $45000:
Period 1
Period 2
Before Tax
$30,000
After Tax
$22,500
The company has an after-tax time value of money of 6.5% and the federal government has a before-tax time value of money of 4%. Should the equipment be purchased?
With the explosion of technological advances in the last 15 years, AIS skills are important for career success in accounting. Why is this important? Provide three reasons or benefits of AIS skills to any accounting-related career.
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