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A new plece of manufacturing equipment costs 795,000. This could be depreciated at 30% per year. The equipment would be worthless after 5years. The new
A new plece of manufacturing equipment costs 795,000. This could be depreciated at 30% per year. The equipment would be worthless after 5years. The new equipment would also require the company to increase NWC by $32,500. This new equipment would save the organization $300,000 per year before taxes and operating costs. Our corporate tax rate is 38% If we require a 15% return what the NPV of this project do we accept or reject this project? Why?
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