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Kinky Copies may buy a high-volume copier. The machine costs $100,000 and will be depreciated straight-line over 5 years to a salvage value of $20,000.

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Kinky Copies may buy a high-volume copier. The machine costs $100,000 and will be depreciated straight-line over 5 years to a salvage value of $20,000. Kinky anticipates that the machine actually can be sold in 5 years for $30,000. The machine will save $20,000 a year in labor costs but will require an increase in working capital, mainly paper supplies, of $10,000. The firm's marginal tax rate is 35%, and the discount rate 8% A) Calculate annual depreciation expense. $ 16,000 B) Calculate annual net operating cash flow. C) Calculate NPV D) Should Kinky purchase the copier? E) Explain why Kinky should or should not purchase the copier

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