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A company is considering the purchase of a new printer. It can purchase the printer for $900 and sell its current printer for $300 today.
A company is considering the purchase of a new printer. It can purchase the printer for $900 and sell its current printer for $300 today. The new printer will last for 6 years and save $200 a year in expenses. The opportunity cost of capital is 15%, and the firm's tax rate is 40%. If the firm uses straight line-depreciation to a salvage value of zero over a six year life, what are projects cash flows and NPV? Should the company purchase the new printer?
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