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You just finished analyzing a 6-year $150 million capital investment project. The resulting NPV is $3 million using a 12% required return and a 35%
You just finished analyzing a 6-year $150 million capital investment project. The resulting NPV is $3 million using a 12% required return and a 35% marginal tax rate. You assumed a $30 million salvage value, $10 million above its adjusted tax basis. How much would the NPV change if you reduced your salvage assumption by $5 million?
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