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Faro lumber, Inc., is considering purchasing a new one saw that cost $45,000. The seller will generate revenues of 100,000 per year for five years.

Faro lumber, Inc., is considering purchasing a new one saw that cost $45,000. The seller will generate revenues of 100,000 per year for five years. The cost of materials and labor needed to generate these revenues will total $60,000 per year, and the other cash expenses will be 10,000 per year. The machine is expected to sell for 1400 at the end of its five-year life and will be depreciated on a straight line bases over five years to zero. Perros tax rate is 26%, and it's opportunity. Cost of capital is 10.30%. What Is the projects and NPV? should the company purchase the saw?

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