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Midtown Textiles is considering an investment in a new fabric dyeing machine: Existing machine's salvage value: $35,000. Cost of new machine: $200,000. Additional working capital:

Midtown Textiles is considering an investment in a new fabric dyeing machine:

  • Existing machine's salvage value: $35,000.
  • Cost of new machine: $200,000.
  • Additional working capital: $40,000.
  • Expected additional cash inflows: $50,000 annually for 6 years.
  • Required rate of return: 13%.

Requirements:

  • Calculate the NPV.
  • Determine the investment's financial viability.

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