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Please help. A new oroject irvolves the purchase (today) of equipment at a cost of s9oog. The machire would bn depreciated on a straight-line basis
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A new oroject irvolves the purchase (today) of equipment at a cost of s9oog. The machire would bn depreciated on a straight-line basis over its 2 -reas usefur life to a book value of $536. Ar the end of the life of the project (at the vear 2 point), the machine will be sold for an estimated 5002 . The project will cause an increase in Sales of $7,569 in each of years 1 and 2 . It is also empected to increase operating expenses by $2.080 in each of vears 1 through 2. The project will require an Increase in Net Workind Capital of 5605 up front (in vear O). The level of Net Working'Capital will retum to its pre-project level entirely in the last year of the project, year 2. The frm's marginal tax rate is 30\%, and its WACC is 10%. The NPV of this project is $ Step by Step Solution
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