XYZ Company

XYZ Company manufactures plastic containers. The company considers investing in a new equipment that will save annual material costs of $14,000 and labour costs of $6,000. The new machine costs $60,000 and has a five-year life and a terminal disposal price of zero. ABCs income tax rate is 30%, and the after-tax required rate of return is 7%. The CCA rate for this new equipment is 20%.

What is the Net Present Value for this project?

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