Kitchener Company runs hardware stores in Alberta. Kitchener's management estimates that if it invests $125,000 in a
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Kitchener Company runs hardware stores in Alberta. Kitchener's management estimates that if it invests $125,000 in a new computer system, it can save $26,000 in annual cash operating costs. The system has an expected useful life of nine years and no terminal disposal value. The required rate of return is 14%. Ignore income tax issues in your answers. Assume all cash flows occur at year-end except for initial investment amounts.
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