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Vetwork Service Center is considering purchasing a new computer network to ing a new computer network for $82,000. The old network can be sold for
Vetwork Service Center is considering purchasing a new computer network to ing a new computer network for $82,000. The old network can be sold for $8,000. The new network will require additional working capital $13.000. Its anticipated eight-year life will generate additional client revenue of $53,000 annually with operating costs, excluding depreciation of $15.000. At the end of eight years will have a salvage value of $9,000 and return $5.000 in working capital. Taxes are no considered. Required: a. If the company has a required rate of return of 14%, what is the net present va proposed investment? 14%, what is the net present value of the h. Assume taxes are 30%. What is the after-tax net present value of the proposed investment
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