Global Industries GI Is Planning to Use Some Existing Equipment

question 12

Multiple Choice

Global Industries GI is planning to use some existing equipment from its own facilities in a foreign project.The used equipment has a book value of $2 million but a market value of $6 million.If GI's marginal tax rate is 34%,what is its opportunity cost of using the used equipment in the foreign project?

• A)$2 million
• B)$3.25 million
• C)$6 million
• D)$4.64 million

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