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Orange Valley Shipping is considering a project that would lastfor 2 years. The project would involve an initial investment of84,000 dollars for new equipment that would be sold for an expectedprice of 76,000 dollars at the end of the project in 2 years. Theequipment would be depreciated to 24,000 dollars over 6 years usingstraight-line depreciation. In years 1 and 2, relevant annualrevenue for the project is expected to be 73,000 dollars per yearand relevant annual costs for the project are expected to be 20,000dollars per year. The tax rate is 50 percent and the cost ofcapital for the project is 6.11 percent. What is the net presentvalue of the project?
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