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Company ABC is considering the replacement of one of its existing machines. The existing machine can be sold now for 10,000. The new machine costs
Company ABC is considering the replacement of one of its existing machines. The existing machine can be sold now for 10,000.
The new machine costs 60,000 and will generate free cash flows of 12,560 p.a. over the next 5 years.
The WACC is 10.20%
What is the NPV of the new machine and should ABC replace the old machine with the new one?
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