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Acme Manufacturing is considering replacing its old conveyor system. The current system can be sold now for $55,000. The new system costs $200,000, with an
Acme Manufacturing is considering replacing its old conveyor system. The current system can be sold now for $55,000. The new system costs $200,000, with an additional $50,000 needed for setup. The expected additional cash inflows are $70,000 in the first year and $150,000 annually for the next two years. The new system has a three-year lifespan with no residual value. Given a required rate of return of 10%, calculate the NPV and decide if the investment is viable.
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