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Suppose you are considering purchasing a $7,500 machine that will increase sales by $2,000 per year over a 4-year period. At the end of the
Suppose you are considering purchasing a $7,500 machine that will increase sales by $2,000 per year over a 4-year period. At the end of the 4 year period, the machine will have a salvage value of 0. The asset will be depreciated to 0 using straight line method. If the appropriate tax rate of 32%, and a required return of 9%, what is the NPV of the project?
I already know the answer (-$1150.15) I would like to know how to solve the problem.
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