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A new excavator worth $10,000 can replace an existing excavator and provide annual savings of $3000 for five years. The old excavator can be sold
A new excavator worth $10,000 can replace an existing excavator and provide annual savings of $3000 for five years. The old excavator can be sold for $500. The new, as well old excavator, are eligible for tax depreciation at 20% per annum of the current value over next 5 years. Assuming a cost of capital at 8% and a tax rate of 30%, what is the project NPV
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