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QUESTION 9 What is the NPV of the new machine project? The project would require an initial investment in equipment of 567.000 and would last
QUESTION 9 What is the NPV of the new machine project? The project would require an initial investment in equipment of 567.000 and would last for either 3 years or in 4 years (the date when the project ends will not be known until it happens and that will be when the equipment stops working in either 3 years from today or 4 years from today). Annual operating cash flows of 521,000 per year are expected each year until the project ends in either 3 years or 4 years. In 1 year, the project is expected to have an after-tax terminal value of $45,000. The cost of capital for this project is 14.5 percent. a. -$9.358 (plus or minus $100) b.-518.652 (plus or minus 5100) C-512.133 (plus or minus $100) d. -56,434 (plus or minus 5100) e. None of the above is within $100 of the correct
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