A company is considering purchasing equipment that will require an immediate outlay of $150,000. Over...
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Finance
A company is considering purchasing equipment that will require an immediate outlay of $150,000. Over the equipment's 16-year life, it will provide the cash benefits shown below. If the company's rate of return is 11% compounded annually, calculate the net present value (NPV) of the proposed purchase, and determine whether the purchase should be made according to the net present value criterion.
Year 1 to Year 10
$20,000 per year
Year 11 to Year 16
$5,000 per year
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