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Your boss wants to know whether buying a new espresso machine will be profitable for the business in 5 years. The company hurdle rate is
Your boss wants to know whether buying a new espresso machine will be profitable for the business in 5 years. The company hurdle rate is 10%, the espresso machine will cost $14,000 (time O), the installation will cost $200 (time 0), and the additional attachments (that your boss just has to have!) will cost $3,000 (time 0). Assuming the espresso machine will bring in $4,500 a year (end of the period), what do you tell your boss is the NPV of this project over the 5 year life? 0-$149.25 O-$139.23 O $141.46 0-$151.71
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