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3. You are considering investing in a process that promises to save you $6000 per year, pre-tax. The process has an expected life of 5

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3. You are considering investing in a process that promises to save you $6000 per year, pre-tax. The process has an expected life of 5 years with an initial cost of S10000. This cost is depreciated straight line over 5 years to a salvage value of SO, although the equipment is actually sold for $2000 after 5 years. Assume a 21% tax bracket. On the time-line diagram below show the relevant cash flows necessary for the NPV calculation. Be sure to show your work for each cash item you deem relevant. (5 points) 0 2 3 4. Calculate the NPV based on the numbers you developed in the previous question. (3 points)

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