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Project Rosie Is a Two- Year Project That Involves the Purchase

Question 19

Multiple Choice

Project Rosie is a two- year project that involves the purchase of new machinery for $10,000,that is expected to yield EBDIT of $7,800 in year 1 and $7,500 in year two.The machine can be depreciated on a straight- line basis.The current corporate tax rate is 30%.What is the project's ARR?


A) 27.3%
B) 19.5%
C) 45.8%
D) 39.1%

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