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Microlab plans to purchase a high-powered microscope for $ 55,000 that requires installation costs of $ 7,500; This investment would be made to replace similar
Microlab plans to purchase a high-powered microscope for $ 55,000 that requires installation costs of $ 7,500; This investment would be made to replace similar equipment that you could sell for $ 35,000 and paying $ 11,250 in sales tax. Due to this transaction, current assets would increase by $ 6,000 and current liabilities would increase by $ 4,000. The investment project would generate a cash inflow of $ 5,000 over 5 years and a terminal cash flow of $ 7,000. If Microlab's cost of capital is 15%, should the project be accepted or rejected?
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