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Intro Heli Cap Inc. is considering replacing the engines on its helicopters. Replacing each engine would cost $110,000, but save the company $19,000 (after taxes)
Intro Heli Cap Inc. is considering replacing the engines on its helicopters. Replacing each engine would cost $110,000, but save the company $19,000 (after taxes) in fuel expenses forever. Since the engine will run more quietly the company also expects more demand and therefore additional profits of $7,800 per helicopter. The company has a cost of capital of 16% and the tax rate is zero. Attempt 1/10 for 10 pts. Part 1 What is the NPV of replacing each engine
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