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Blombo Ltd. manufactures headphones. Its workers are experiencing hand cuts and burns. Blombo considers a worker safety initiative to reduce hand injuries. The program would
Blombo Ltd. manufactures headphones. Its workers are experiencing hand cuts and burns. Blombo considers a worker safety initiative to reduce hand injuries. The program would cost $150,000 initially and an additional $40,000 after one year. It is expected to reduce worker hand injuries by $25,000 per year at the end of the first and second years and $60,000 per year at the end of the third, fourth, and fifth years. Blombos cost of capital is 6%. What is the net present value of this project? Is this a worthwhile investment? Show your work.
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