ABC Inc. is considering the purchase of a new machine for $250,000. The machine has a useful
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ABC Inc. is considering the purchase of a new machine for $250,000. The machine has a useful life of 5 years and is expected to generate annual cash inflows of $70,000. The salvage value of the machine after 5 years is expected to be $50,000. ABC's required rate of return is 10%. Calculate the net present value (NPV) of the machine purchase and advise the company on whether or not to proceed with the purchase.
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