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Suppose you have been hired as a financial consultant to Defense Electronics, Incorporated (DEI), a...

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Accounting

Suppose you have been hired as a financial consultant to Defense Electronics, Incorporated (DEI), a large, publicly traded firm that is the market share leader in radar detection systems (RDSs). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. This will be a five-year project. The company bought some land three years ago for $4.3 million in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely discard the chemicals instead. The land was appraised last week for $6.7 million on an aftertax basis. In five years, the aftertax value of the land will be $7.8 million, but the company expects

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