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A company making plastic car parts buys new molding machines to expand its production capacity. The machines cost $ 3 million, with additional charges for

A company making plastic car parts buys new molding machines to expand its production capacity. The machines cost $3 million, with additional charges for delivery and installation totaling $39,020. Employees will have to be trained to use the new machines at the cost of $34,252. With the increased production, accounts payable will increase by $52,076, inventory will increase by $71,777, and accounts receivable will increase by $63,969 at the outset. These changes in the working capital will be recaptured at the end of the projects life of 5 years. The depreciable life of the machines is 10 years, and the company uses straight-line depreciation. The increased production will increase the sales revenue by $3 million and the costs (including depreciation) by $410,850 per year in each of the next 5 years. The company expects to sell the machines after five years for $379,932. The companys tax rate is 20%, and its cost of capital (the projects req

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