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Trilogy Construction, Inc. is considering purchasing a new piece of machinery that would save it $40,000 a year in annual labor costs. The machine would
Trilogy Construction, Inc. is considering purchasing a new piece of machinery that would save it $40,000 a year in annual labor costs. The machine would cost $130,000 and is expected to last 5 years and have a $10,000 salvage value. The companys cost of capital is 8%. A) What is the machines net present value? B) Should the company buy the machine? Use the TVM tables and please show your work.
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