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Problem 12 Intro Heli Cap Inc. is considering replacing the engines on its helicopters. Replacing each engine would cost $110,000, but save the company $15,000
Problem 12 Intro Heli Cap Inc. is considering replacing the engines on its helicopters. Replacing each engine would cost $110,000, but save the company $15,000 (after taxes) in fuel expenses forever. Since the engine will run more quietly the company also expects more demand and therefore additional profits of $7,100 per helicopter. The company has a cost of capital of 13% and the tax rate is zero. Part 1 Attempt 1/5 for 10 pts. What is the NPV of replacing each engine? No decimals Submit
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