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Cooper Construction is considering purchasing new, technologically advanced equipment. The equipment will cost $625, 000 with a salvage value of $50, 000 at the end
Cooper Construction is considering purchasing new, technologically advanced equipment. The equipment will cost $625, 000 with a salvage value of $50, 000 at the end of its useful life of 10 years. The equipment is expected to generate additional annual cash inflows with the following probabilities for the next ten years:
Probability | Cash Flow
0.15 | $60,000
0.25 | $85,000
0.45 | $110,000
0.15 | $130,000
What is the expected net present value?
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