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The law firm of Bushmaster, Cobra and Asp is considering investing in a complete small business computer system. The initial investment will be $ 3
The law firm of Bushmaster, Cobra and Asp is considering investing in a complete small business computer system. The initial investment will be $ and the hardware, which will be used for years with a salvage value of $ and software of $ In each of years and $ will be spent for additional software. Hardware has a CCR rate percent and software is class percent The computer system is expected to provide additional revenue of $ per year for the next years, and to reduce expenses by $ per year for the same period. The firm's cost of capital is percent and its tax rate is percent. Based on a net present value analysis, should this investment be accepted?
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