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Unformatted text preview: years using the straight-line method for both tax and financial reporting purposes. In addition to the cost of the machine, the company will incur incremental manufacturing costs of $400,000 for component parts, $440,000 for direct labor, and $225,000 of miscellaneous costs. Also, the company plans to spend $150,000 annually to advertise Autodial. Van Doren has a tax rate of 40 percent, and the company’s required rate of return is 14 percent....
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- Spring '11
- Net Present Value, Van Doren, Van Doren Corporation