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Required information Exercise 1 6 - 3 5 Payback Period; Even Cash Flows ( Section 3 ) ( LO 1 6 - 1 , 1

Required information Exercise 16-35 Payback Period; Even Cash Flows (Section 3)(LO 16-1,16-6,16-8)[The following information applies to the questions displayed below.] The management of Niagra National Bank is considering an investment in automatic teller machines. The machines would cost $124,200 and have a useful life of seven years. The bank's controller has estimated that the automatic teller machines will save the bank $27,000 after taxes during each year of their life (including the depreciation tax shield). The machines will have no salvage value. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Exercise 16-35 Part 22. Compute the net present value of the proposed investment assuming an after-tax hurdle rate of: (a)10 percent, (b)12 percent, and (c)14 percent. (Negative amounts should be indicated by a minus sign.) Answer is complete but not entirely correct. Net Present Value (a)10 percent $ 93,609(b)12 percent $ 80,00214(C) $ 62,688 percent

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