Lem E Tweakit Inc. is considering the purchase of a new magic marker machine. This machine will reduce manufacturing costs by $6,000 annually. The new machine will be in CCA class 8 (d = 20%). The firm expects to sell the machine at the end of its 5-year life for $10,000. The firm also expects to be able to reduce net working capital by $18,000 when the machine is installed. The firm's marginal tax rate is 40% and it uses a 12% cost of capital to evaluate projects of this nature. If the machine costs $60,000 .what is the NPV of the project?

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Heres how to calculate the Net Present Value NPV of the project for Lem E Tweakit Inc 1 Define Variables Cost of Machine CM 60000 Annual Cost Saving A... View the full answer