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For credit, you must show your calculations for this problem. Blue Co. can purchase a...

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Accounting

For credit, you must show your calculations for this problem.

Blue Co. can purchase a new machine at a cost of $43,000. The machine is expected to generate cash inflows of $15,000 for 3 years and have a salvage value of $2500 at the end of its useful life.

If Blue Co. has a required rate of return of 6%, what is the NPV of this investment? Based on NPV should Blue Co. purchase this machine?

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