Vitron Inc - 6 years The company is in a 30 tax rate and is...

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Vitron Inc. is considering an investment in new capital equipment that will cost €250,000 plus an additional €15,000 investment in inventory to operate the equipment. They expect sales to increase by €177,000 a year for the next 6 years. Vitron executives are expecting expenses and costs to generate those sales will be €93,000 per year for the next
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Unformatted text preview: 6 years. The company is in a 30% tax rate and is depreciating the equipment to a salvage value of €25,000 using straight line depreciation over its six year life. The company expects to recover the investment in inventory in year 6, and expects the equipment will be sold for €50,000. The cost of capital for Vitron is 12%....
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