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A company is considering investing in some new fabricating machinery. The NPV analysis produces a positive NPV of $800,000. This is based on depreciating the
A company is considering investing in some new fabricating machinery. The NPV analysis produces a positive NPV of $800,000. This is based on depreciating the machinery over seven years. The company discovers that this particular type of machinery can depreciated using an accelerated method over four years.
How will the NPV change if this new method is used? Explain why the change occurs.
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