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NPV Commodity Copper is considering the installation of a $1,602,000 production conveyor system that would generate the following labor cost savings over its 10-year
NPV Commodity Copper is considering the installation of a $1,602,000 production conveyor system that would generate the following labor cost savings over its 10-year life: Years Annual Labor Cost Savings 1-2 $280,000 3-5 6-8 9-10 340,000 288,800 260,000 a. The system will have no salvage at the end of its 10-year life, and the company uses a discount rate of 12 percent. What is the pre-tax net present value of this potential investment? Note: Round your final answer to the nearest whole dollar; use a negative sign to indicate a negative net present value. $ 0 b. Should the company make this investment based on the results of part (a)? Yes = Check
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