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Scott Investors, Inc. is considering the purchase of a $360,000 computer with an economic life of five years. The computer will be fully depreciated over
Scott Investors, Inc. is considering the purchase of a $360,000 computer with an economic life of five years. The computer will be fully depreciated over five years using the straight-line method. The market value of the computer will be $60,000 in five years. The computer will replace five office employees whose combined anual salaries are $105,000. The market will also immediatedly lower the firm's require net working capital by $80,000. This amount of net working capital will need to be replaced once the machine is sold. The corporate tax rate is 34%. The appropriate discount rate is 12%. CALCULATE THE NPV OF THIS PROJECT. (Please show work) Comment
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