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Franklin Bakery is considering buying a new doughnut-making machine.The cost of the machine is $10,000.The machine will last for ten years and is expected to
Franklin Bakery is considering buying a new doughnut-making machine.The cost of the machine is $10,000.The machine will last for ten years and is expected to be worth $1,000 as scrap at that time.The new machine will reduce operating costs by $900 per year.In addition, the new machine will allow for an increase in production of 10,000 doughnuts per year.Franklinmakes 10 cents on each doughnut it sells.The required rate of return on this project is 16 percent. What is the NET PRESENT VALUE for the doughnut machine?
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