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Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $318,000 per year. You believe the
Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $318,000 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,710,000. The cost of the machine will decline by $105,000 per year until it reaches $1,185,000, where it will remain. If your required return is 13 percent, calculate the NPV today(Do not round intermediate calculations and round your answer to 2 decimal places, e.g, 32.16.) NPV $ 15545.43 0 If your required return is 13 percent, calculate the NPV if you wait to purchase the machine until the indicated year(A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) NPV Year 1 Year 2 Year 3 $ 69144.84 $ 61861.58 $ 64876.34 $ 75916.08 $ 93094.43 $ -114852.1 0 Year 4 Year 5 Year 6
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