Use straight-line depreciation and assume no salvage value


The Big Bun Company (BBC) is considering the installation of a new bun baking system that costs $245,000. This system is expected to save BBC $40,000 per year in labor costs for the next 15 years. Maintenance costs are expected to average $7,000 per year. Use straight-line depreciation and assume no salvage value. The total income tax rate is 34%. State below the after-tax rate of return for this project.

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Financial Management: Use straight-line depreciation and assume no salvage value
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