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Cullumber Inc. manufactures snowsuits. Cullumber is considering purchasing a new sewing machine at a cost of $245 million. Its existing machine was purchased 5 years
Cullumber Inc. manufactures snowsuits. Cullumber is considering purchasing a new sewing machine at a cost of $245 million. Its existing machine was purchased 5 years ago at a price of $1.8 million, six months ago, Cullumber spent $55,000 to keep it operational The existing sewing machine can be sold today for $241.920. The new sewing machine would require a one-time. $85,000 training cost. Operating costs would decrease by the following amounts for years 1 to 7: Year 1 $389,300 2 399.400 3 410,500 4 425.500 5 432,800 6 435,500 7 437,400 The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage valuels expected to be $380,100. This new equipment would require maintenance costs of $95,100 at the end of the fifth year. The cost of capital is 9% Click here to view the factor table. Use the net present value method to determine the following: (If net present value is negative then enter with negative sign preceding the number eg.-45 or parentheses es. (45), Round present value answer to O decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided) Calculate the net present value. Netcon
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