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Pique Corporation wants to purchase a new machine for $300,000. Management predicts that the machine...

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Accounting

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Pique Corporation wants to purchase a new machine for $300,000. Management predicts that the machine can produce sales of $200,000 each year for the next 5 years. Expenses are expected to include direct materials, direct labor, and factory overhead (excluding depreciation) totaling $80,000 per year. The firm uses straight-line depreciation with no residual value for all depreciable assets. Pique's combined income tax rate is 40%. Management requires a minimum after-tax rate of return of 10% on all investments. What is the amount of net income (after taxes) in Year 2 of the investment? Round to the nearest whole number. Paragraph B I PE 2

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