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A firm is determining the NPV for a project that will be terminated after 5 years. They will purchase equipment today that will be fully
A firm is determining the NPV for a project that will be terminated after 5 years. They will purchase equipment today that will be fully depreciated to zero over 5 years. The firm anticipates that they can sell the used equipment in five years for 20% of the initial investment. There are no opportunity costs or taxes. The level of working capital in each of years 1 through 4 is 15% of sales, and sales in Year 4 will be $3,000,000. If the total value of the investment account in year 5 is $1,250,000, what is the cost of the original investment
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