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DataPoint Engineering is considering the purchase of a new piece of equipment for $ 2 0 0 , 0 0 0 . It has an
DataPoint Engineering is considering the purchase of a new piece of equipment for $ It has an eightyear midpoint of its asset depreciation range ADR It will require an additional initial investment of $ in nondepreciable working capital. $ of this investment will be recovered after the sixth year and will provide additional cash flow for that year. Income before depreciation and taxes for the next six are shown in the following table. Use Table Table Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.
tableYearAmount$
B Determine the annual cash flow for each year. Be sure to invlude the recovered working capital year
C Determine tge weighted average cost of capital.
D Determine the net present value.
d Should dara point purchase new equipment? Yes or No
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