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Management of Braden Boats, Inc. is considering an expansion in the firm s product line that requires the purchase of an additional $ 1 5
Management of Braden Boats, Inc. is considering an expansion in the firms product line that requires the purchase of an additional $ in equipment with installation costs of $ and removal expenses of $Note: the removal expenses are considered terminal cash flows and not associated with the installation of the new equipment The equipment and installation costs will be depreciated over five years using straightline depreciation. The expansion is expected to increase earnings before depreciation and taxes as follows:
Years and Years and Year
$ $ $
The firms income tax rate is percent and the weightedaverage cost of capital is percent. Based on the net present value method of capital budgeting, should management undertake this project? Use Appendix B to answer the question. Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar.
NPV: $
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