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You work for Toys USA and are evaluating an investment opportunity, which involves buying a machine for $ 9 0 , 0 0 0 today.
You work for Toys USA and are evaluating an investment opportunity, which involves buying a machine for $ today. The project will produce an annual cash inflow of $ for the next years but company also needs to spend $ nine years from now on machine disposal and cleanup costs. The opportunity cost of capital is
A What is the NPV of the project?
B What isare the IRRs of the project? If there more than one IRR, show all IRR solutions.
C Should you buy the machine? Why or why not? Limit the explanation to no more than words.
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