What are the annual savings before depreciation

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Question: Jerome purchased a machine that will produce annual savings, net of taxes, of $67,800 at the end of each of the next 5 years. Jerome requires a 12% rate of return and the asset has a 5-year useful life and no salvage value. Jerome uses straight-line depreciation. Jerome paid $120,000 for this machine. The tax rate is 40%. What are the annual savings before depreciation and taxes each year?

Reference no: EM133327553

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