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Excel work please Correct answer: 107,288 You are considering the purchase of a new machine for a project. Details of this potential purchase are provided
Excel work please
Correct answer: 107,288
"You are considering the purchase of a new machine for a project. Details of this potential purchase are provided below. -The project life is 3 years. The machine costs $161,000. * You will pay cash for half of this machine immediately, and will borrow the remaining half at 7% annual rate compounded annually over 3 years. * The machine will be depreciated using a seven year MACRS approach. Annual O&M costs (expenses) of the machine are $24,000. Annual labor savings (revenues) are $143,000. Salvage value at the end of year 3 will be $71,500. Working capital requirement is initially $33,000. Any investment in working capital will be recovered at the end of the project. Assume an income tax rate and gains tax rate of 21%. Find the NPW of this project based on a MARR of 17%." "You are considering the purchase of a new machine for a project. Details of this potential purchase are provided below. -The project life is 3 years. The machine costs $161,000. * You will pay cash for half of this machine immediately, and will borrow the remaining half at 7% annual rate compounded annually over 3 years. * The machine will be depreciated using a seven year MACRS approach. Annual O&M costs (expenses) of the machine are $24,000. Annual labor savings (revenues) are $143,000. Salvage value at the end of year 3 will be $71,500. Working capital requirement is initially $33,000. Any investment in working capital will be recovered at the end of the project. Assume an income tax rate and gains tax rate of 21%. Find the NPW of this project based on a MARR of 17%Step by Step Solution
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