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urgent please As the financial head of the firm you have been asked to prepare a senario analysis of importance of a new machine on
urgent please
As the financial head of the firm you have been asked to prepare a senario analysis of importance of a new machine on the NPV of the firm. The new machine would have a net cost of $45,500, would increase pretax operating cash flows before taking account of depreciation by $13,000 per year. It would be depreciated on a straight-line basis to zero over 7 years at the rate of $6,500 per year beginning the first year. There is a debate about whether that machine would last 7 years. The controller say that he knows of a maachine that has lasted only for 5 years. The treasurer agrees with the controller, but he argues that most machines do give 7 years of service. The service manager then states that some last as long as 10 years. Use a 35% marginal federal-plus-state tax rate, a zero salvage value, and a 7% WACC. Assuming each of the indicated lives has the same probability of occurring (probability=1/3), Calculate expected NPVStep by Step Solution
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