The latest manufacturing equipment is purchased at a cost of $800,000. As a result, annual...
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Accounting
The latest manufacturing equipment is purchased at a cost of $800,000. As a result, annual cash revenues are expected to increase by $345,000; annual cash expenses are expected to increase by $162,000; straight-line depreciation is used; the asset has a seven-year life; the salvage value is $100,000. Assume the company is in the new 21% corporate tax bracket.
Determine the NPV assuming a minimum required rate of return of 8%? Please show work.
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