Assume that to comply with the Air Quality Control Act of 1989, a company must install three
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Assume that to comply with the Air Quality Control Act of 1989, a company must install three smokestack scrubber units to its ventilation stacks at an installed cost of $335,000 per unit. An estimated $100,000 per unit in fines could be saved each year over the five-year life of the ventilation stacks. The cost of capital is 14% for the firm.
a) Draw the timeline with the cash flows for the project.
b) Calculate the NPV of the project and make the decision to accept/reject.
Briefly explain.
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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