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Net Investment for a Mixer

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LISP Inc. is planning to purchase a new mixer/dubber for $50,000. The new equipment will replace an older mixer that has been fully depreciated but has a salvage value of $5,000. Compute the net investment required for this project. Assume a marginal tax rate of 40 percent.
a. $47,000
b. $45,000
c. $48,000
d. none of the above

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Solution Summary

Brief calculations show how to find the net investment of buying a new mixer with a marginal tax rate of 40%.

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