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Allegience Insurance Companys management is considering an advertising program that would require an initial expenditure...

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Accounting

Allegience Insurance Companys management is considering an advertising program that would require an initial expenditure of $193,635 and bring in additional sales over the next five years. The projected additional sales revenue in year 1 is $92,000, with associated expenses of $33,500. The additional sales revenue and expenses from the advertising program are projected to increase by 10 percent each year. Allegiences tax rate is 40 percent. (Hint: The $193,635 advertising cost is an expense.)

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