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The Dallas Starts Hockey Club is considering the purchase of a new Zambians machine. The current Zamboni being used has a book value of zero
The Dallas Starts Hockey Club is considering the purchase of a new Zambians machine. The current Zamboni being used has a book value of zero and a market value of zero, but is in good working orderand will last for at least an additional 10 years. The proposed new Zamboni II machine is anticipated to operate more efficiency, and the Stars depreciation staff has estimated that it will produce after-tax cash flows(labour savings and depreciation) of $5000 per year. The new machine will cost $25000 delivered, and its economic life is estimated at 10 years. Zamboni II's salvage value will be zero. If the Star's cost of capital is 12%, and its marginal tax rate is 40%, should the Dallas Stars buy the new Zamboni machine? A. NPV=-2351. Do not buy the new machine B. NPV=3251. Buy the new machine C. NPV=0. No decision D. NPV=2351. Buy the machine Could you please use financial calculator to solve this problem and provide how to input
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