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Sigma Tools Will Lease a Computerized Stamping Machine from StarBanc

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Sigma Tools will lease a computerized stamping machine from StarBanc. The machine costs $500,000 and will be depreciated on a straight-line basis to a zero book value over the next 5 years, which is also the term of the lease. The expected salvage value in 5 years is $25,000. StarBanc's marginal tax rate is 30% and it requires an after-tax rate of return of 12% on investments of this type. What annual, beginning-of-the-year, pretax lease payment must StarBanc receive to earn the required 12% return?

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Institutionalized system

A well-established and widely accepted system that operates according to formal rules and norms within a particular context.

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The ways in which workers can express their opinions, concerns, and suggestions regarding workplace decisions and policies.

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