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Crane Sporting Goods is planning to buy a new equipment to replace the existing old equipment. The new equipment will not affect the firm's unlevered
Crane Sporting Goods is planning to buy a new equipment to replace the existing old equipment. The new equipment will not affect the firm's unlevered net
income or net working capital. The old equipment was purchased years ago at a price of $ million and follows a fiveyear straightline depreciation
method. The old equipment has a market value of $ million now and $ in the future. The new equipment will cost $ million and follows a fiveyear
straightline depreciation method. By the end of year five, the CFO expects to sell the new equipment for a price of $ million. What is the NPV of the
equipment replacement plan for the next five years at a discount rate of The marginal tax rate for the firm is
A million
B million
C million
D million
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