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Your company is analyzing purchase of a machine costing $4,000 today. The investment promises to add $10,000 to sales one year from today, $12,500 two
Your company is analyzing purchase of a machine costing $4,000 today. The investment promises to add $10,000 to sales one year from today, $12,500 two years from today, and $14,500 three years from today. Incremental cash costs should consume 80% of the incremental sales. The tax rate is 30% and the companys financing rate is 12.9%. The investment cost is depreciated to zero over a 3-year straight-line schedule. Find the projects net present value and internal rate of return
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