A company is considering the purchase of an item of equipment costing $60,000. It would...
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Accounting
A company is considering the purchase of an item of equipment costing $60,000. It would have a five-year life. The equipmnet would be expected to generate net cash flows of $18,000 each year for the first four years and $6000 in the fifth year. After the end of the Year 5 it would be disposed of for $5000. The company cost capital is 7%.
Required:
Using discount tables, Calculaye the NPV of this investment and indicate whether or not it would be finacially viable.
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