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uary Company is considering an investment in machinery with the following information. The company's required rate of return is 12%. (PV of $1, FV of
uary Company is considering an investment in machinery with the following information. The company's required rate of return is 12%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Initial investment Useful life Salvage value Expected sales per year $201,000 Materials, labor, and overhead (except depreciation) 9 years Depreciation-Machinery $ 47,000 20,100 Selling, general, and administrative expenses 11,000 units Selling price per unit 7,000 $ 11 $ 20,100 a. Compute the investment's net present value. b. Using the answer from part a, is the investment's internal rate of return higher or lower than 12%? Complete this question by entering your answers in the tabs below. Required A Required B Compute the investment's net present value. (Negative net present values should be indicated with a minus sign. Round your present value factor to 4 decimals. Round your answers to the nearest whole dollar.) Net Cash Flows x Present Value Present Value of Net Cash Flows Years 1-91 Year 9 salvage: Totals $ Initial investment Net present value Required A Required B
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