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Your company is analyzing purchase of a machine costing $10,900 today. The investment promises to add $10,500 to sales one year from today, $22,500 two
Your company is analyzing purchase of a machine costing $10,900 today. The investment promises to add $10,500 to sales one year from today, $22,500 two years from today, and $25,000 three years from today. Incremental cash costs should consume 75% of the incremental sales. In addition, the project will require $5000 in working capital at the outlay of the project which will be repaid in the last year of the project. The tax rate is 35% and the company's financing rate is 10.4%. The investment cost is depreciated to zero over a 3-year straight-line schedule. Find the project's net present value and internal rate of return
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