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Can you please use excel formulas to solve it Problem Four (20 marks) DDD is debating the purchase of a new digital scanner. The scanner
Can you please use excel formulas to solve it
Problem Four (20 marks) DDD is debating the purchase of a new digital scanner. The scanner they acquired 3 years ago for $800,000 is worth $320,000 today and will have a salvage value of $95,000 after 5 more years. The scanner generates revenues of $300,000 per year. The costs of operating the scanner are $130,000 per year. The company currently has $50,000 invested in operating networking capital. The new scanner will cost $980,000. The new scanner will generate revenues of $415,000 per year. In addition, the costs of operating the new scanner will be $125,000. The new scanner will allow the company to reduce its investment in operating net working capital to $15,000. At the end of 5 years, the new machine will have a salvage value of $220,000. The company's corporate tax rate is 32%, the CCA rate is 30% and the required rate of return is 10% Assume the asset class remains open, Using net present value (NPV) calculation, determine if the company should purchase the new scanner. Show all workStep by Step Solution
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