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Gray Metals company needs a new machine which would save the company 3,000 annually for the first five years and then 2,000 annually for another
Gray Metals company needs a new machine which would save the company 3,000 annually for the first five years and then 2,000 annually for another 5 years. Gray will depreciate the machine on a straight line basis for 10 years. Gray is in a 40% tax bracket and its after tax cost of capital is 8%. What is the break even price of the machine for gray? Allow the purchase price of the machine to range from 10,000 to 30,000 in increments of 1000, use a data table to calculate NPV plot NPV into a graph
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