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Simone Company is considering the purchase of a new machine costing USD 50,000. It is expected to save USD 9,000 cash per year for 10
Simone Company is considering the purchase of a new machine costing USD 50,000. It is expected to save USD 9,000 cash per year for 10 years, has an estimated useful life of 10 years, and no salvage value. Management will not make any investment unless at least an 18 per cent rate of return can be earned. Using the net present value method, determine if the proposal is acceptable. Assume all tax effects are included in these numbers.
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