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Book & Bible Bookstore desires to buy' a new coding machine to help control book inventories. The machine sells for $38,586 and requires working capital
Book \& Bible Bookstore desires to buy' a new coding machine to help control book inventories. The machine sells for $38,586 and requires working capital of $4,000. Its estimated useful life is five years and will have a salvage value of $4,000. Recovery of working capital will be $4,000 at the end of its useful life. Annual cash savings from the purchase of the machine will be $10,000. Required: 1. Compute the net present value at a 14% required rate of return. 2. Compute the internal rate of return. 3. Determine the payback period of the investment
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