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You are considering purchasing a new automated forklift system for your firm's warehouse. The automated forklift will cost $500,000 and generate cash flows of $125,000

You are considering purchasing a new automated forklift system for your firm's warehouse. The automated forklift will cost $500,000 and generate cash flows of $125,000 per year. The forklift will depreciate evenly over the five years, at which point it must be replaced. The cost of capital is 8% per year. What is the annual EVA in year 3 after the forklift purchase?

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