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AGMA Inc. is planning on investing in a new production line. Estimates for the capital costs of the line are Low: $320,000 10% likelihood Nominal:

AGMA Inc. is planning on investing in a new production line. Estimates for the capital costs of the line are

  • Low: $320,000 10% likelihood
  • Nominal: $580,000 65% likelihood
  • High: $900,000 25% likelihood

Estimates for the net sales revenues are

  • Low: $155,000 per year 15% likelihood
  • Nominal: $260,000 per year 70% likelihood
  • High: $340,000 per year 15% likelihood

Assume the line will run for six years, and you have an MARR of 15%. Determine the overall expected NPV for this project.

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