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I am trying to get the right number if anyone could do it with an explanation please. A new electronic process monitor costs $990,000. This
I am trying to get the right number if anyone could do it with an explanation please.
A new electronic process monitor costs $990,000. This cost could be depreciated at 30% per year {Class 10}. The monitor would actually be worth $100,000 in ve years. The new monitor would save $460,000 per year before taxes and operating costs. The new monitor requires us to increase net working capital by $472200 when we buy it. Assume a tax rate of 40%. a. If we require a 15% return, what is the NPV of the purchase? (Do not round intermediate calculations. Round the nal answer to 2 decimal places. Omit 5 sign in your response.) NPV $ 1,033,201 h. Suppose the monitor was assigned a 25% CCA rate. Calculate the new NPV. {Do not round intermediate calculations. Round the nal answer to 2 decimal places. Omit $ sign in your response.) NW as: c. Will the NPV at 25% CCA rate be larger or smaller? O Smaller 0 LargerStep by Step Solution
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