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Riverview Company is evaluating the proposed acquisition of a new production machine. The machine's base price is $ 2 0 0 , 0 0 0
Riverview Company is evaluating the proposed acquisition of a new production machine. The machine's base price is $ and installation costs would amount to $ Also, $ in net working capital would be required at installation. The machine will be depreciated for years using simplified straight line depreciation. The machine would save the firm $ per year in operating costs. The firm is planning to keep the machine in place for years. At the end of the second year, the machine will be sold for $ Riverview has a cost of capital of and a marginal tax rate of
What is the NPV of the project?
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