The Terme Corporation is contemplating the purchase of new equipment, which may potentially increase revenues...
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Accounting
The Terme Corporation is contemplating the purchase of new equipment, which may potentially increase revenues by 25%. Currently, sales are $780,000 per year and cost of sales are 55% of sales. The equipment is expected to last for 5 years with no residual value. The cash outflow expected at the beginning of the year is $359,000. What is the amount of depreciation deduction the company could expense annually assuming the straight-line depreciation method is used? Multiple Choice O O $32,310 $39,490 O O $7,800 $71,800 a $78,000
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