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Information: Dorothy & George Company is planning to acquire a new machine at a total cost of $35,000. The machines estimated life is 6 years

Information: Dorothy & George Company is planning to acquire a new machine at a total cost of $35,000. The machines estimated life is 6 years and its estimated salvage value is $800. The company estimates that annual cash savings from using this machine will be $9,100. The companys after-tax cost of capital is 10% and its income tax rate is 40%. The company uses straight-line depreciation (non-MACRS-based).

Question: Assume that the net after-tax annual cash inflow of this investment is $5,000; what is the net present value (NPV) of this investment?

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