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Business, 06.12.2020 14:00 gwendallinesikes

gluon inc. is considering the purchase of a new high pressure glueball. it can purchase the glueball for $90,000 and sell its old low pressure glueball, which is fully depreciated, for $16,000. the new equipment has a 10-year useful life and will save $20,000 a year in expenses. the opportunity cost of capital is 8%, and the firm's tax rate is 21%. what is the equivalent annual saving from the purchase if gluon can depreciate 100% of the investment immediatley.

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