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Question 1: If buy an equipment for $30 million, and it is projected that equipment will have economic life of 10 years. After buying the equipment, it requires to renovate the production bay and install the equipment at a total cost of $1.2 million. The equipment will be procured from GERMANY and the company has to pay 8% import duty on purchase price, whereas the supplier will pay transportation costs of $80,000. Equipment would be depreciated over its useful life of 10 years using a tax allowable straight-line rate of 10%. What is annual depreciation cost of equipment?
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