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Greene's Great Generators, Inc. (GGG) a manufacturer of power generation gear, plans invest in a high efficiency milling machine. The machine will have an installed

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Greene's Great Generators, Inc. (GGG) a manufacturer of power generation gear, plans invest in a high efficiency milling machine. The machine will have an installed cost of $500,000 and will be depreciated on a straight-line basis over its expected 5 year life to a salvage value of zero. The new milling machine is not expected to impact the revenue of the company, but it is expected to lower the company's operating expenses by $130,000 per year over the next five years. GGG's cost of capital is 9% and the company's tax rate is 25% What is the annual net operating cash flow for each year for the next five years? What is the net present value of the project? What is the internal rate of return of the project? a What is the profitability index of the project? Next page

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