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You own a warehouse company, which provides logistics services to online retailers. You are considering overhauling an existing packaging line in one of your warehouses.The

You own a warehouse company, which provides logistics services to online retailers. You are considering overhauling an existing packaging line in one of your warehouses.The new robotic technology you consider costs $30.00 million in Year 0 and has a useful life of 4 years. You estimate that increased efficiency and throughput will generate incremental revenue of $20.00 million in Year 1, Year 2, Year 3, and Year 4.Operating expenses (without depreciation) for the warehouse are 70.00% of the total revenue each year. Assume that the new equipment will be depreciated using a straight-line method over 4 years. The appropriate cost of capital is 10.00% and the tax rate is 35.00%.Your goal is to make a decision on whether to proceed with the overhaul of the existing line.

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