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Auto Part Ltd is evaluating whether it should buy a new a machine that would cost $750,000. The firm expects the machine will generate additional
Auto Part Ltd is evaluating whether it should buy a new a machine that would cost $750,000. The firm expects the machine will generate additional cash inflows of $248,000 per year for the next 4 years (assume cash inflows are received at the end of the year). The firm requires a 12% rate of return on its capital expenditures. If the firm uses the Net Present Value to evaluate capital expenditures, which of the following is correct?
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