Question: A new electronic process monitor will cost Clarke Designs 145 000
A new electronic process monitor will cost Clarke Designs $145,000. This cost will be depreciated at 25 percent per year (class 9). The monitor will actually be worth-less in six years. The new monitor would save Clarke $62,000 per year before taxes in operating costs. If Clarke requires a 13.5 percent return, what is the NPV of the purchase? Assume a tax rate of 38 percent.
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