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Blue Sky Corporation is evaluating the proposed acquisition of a new production machine. The machine's base price is $260,000, and installation costs would amount
Blue Sky Corporation is evaluating the proposed acquisition of a new production machine. The machine's base price is $260,000, and installation costs would amount to $20,000. An additional $12,000 in net working capital would be required at installation. The machine has a class life of 2 years. The machine would save the firm $150.000 per year in operating costs. The firm is planning to keep the machine in place for 2 years. At the end of the second year, the firm plans to sell the machine for $100,000. The firm has a required rate of return on investment projects of 10% and a marginal tax rate of 21%. What is the NPV of the project? O $14,759 O $23,570 $169.627 O $39,893 $104,705
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