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A project requires the purchase of machinery for $40,000. The machinery belongs in a 20% CCA class and will have a salvage value of $4,000
A project requires the purchase of machinery for $40,000. The machinery belongs in a 20% CCA class and will have a salvage value of $4,000 at the end of the 4 year project. It will require a net working capital investment of $5,000 up-front and this will be recaptured at the end of the project. The firm has a tax rate of 34% and a required return of 10%. The project generates after-tax operating income of $10,001 every year. What is the project's NPV?
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