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A cloth manufacturing firm is deciding whether or not to invest in new machinery. The machinery costs $45,000 and is expected to increase cash flows

A cloth manufacturing firm is deciding whether or not to invest in new machinery. The machinery costs $45,000 and is expected to increase cash flows in the first year by $25,000 and in the second year by $30,000. The firms current fixed costs are $9,000 and the current marginal cost is $15. The firm currently charges $18 per unit. If the interest is 5%, should the firm undertake the investment? a. Yes, since NPV<0 b. no, since npv c. yes,>0 d. Yes, since NPV=0

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