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A firm purchased a machine with a life of four years. Depreciating the machine using straightline depreciation over the four years yields an NPV =$10.

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A firm purchased a machine with a life of four years. Depreciating the machine using straightline depreciation over the four years yields an NPV =$10. The initial investment was $1000, cost of capital =15%, and tax rate =34%. If the firm is allowed to depreciate the machine under the MACRS 3-year class, what will be the new net present value? Assume losses, if any, will save taxes on other operations of the company. MACRS Depreciation Table

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