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Consider a $12,000 machine that will reduce after-tax operating costs by $2,500 per year over a five-year period. Assume no changes in net working capital
Consider a $12,000 machine that will reduce after-tax operating costs by $2,500 per year over a five-year period. Assume no changes in net working capital and a salvage value of zero. Further assume that the machine belongs in a 20% CCA class, a marginal tax rate of 34%, and a required return of 10%. The project NPV is:
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