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Overnight Laundry is considering the purchase of a new pressing machine that would cost $120 000 and produce incremental operating cash flows of $32 000
Overnight Laundry is considering the purchase of a new pressing machine that would cost $120 000 and produce incremental operating cash flows of $32 000 annually for 18 years. The machine has a terminal value of $9 000 and is depreciated for income tax purposes using straight-line depreciation over a 18-year life. Overnight Laundrys marginal tax rate is 30%. The company uses a discount rate of 10 per cent. Compute the NPV of the project and enter the amount in the answer block below.
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