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

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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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