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Birkenstock is considering an investment in a nylon - knitting machine. The machine requires an initial investment of $ 2 6 , 5 0 0

Birkenstock is considering an investment in a nylon-knitting machine. The machine requires an initial investment of $26,500, has a five-year life, and has no residual value after five years. The company's cost of capital is 10.61%. The company has estimated expected cash inflows for three scenarios: pessimistic, most likely, and optimistic. These expected cash inflows are listed in
\table[[,Expected cash inflows],[Year,Pessimistic,Most likely,Optimistic],[1,$6,850,$9,310,$11,790
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