Question: If Dr. Smith buys a machine for $5,000 and is able to improve the earnings of her practice by $2,000 a year for five years,

If Dr. Smith buys a machine for $5,000 and is able to improve the earnings of her practice by $2,000 a year for five years, and then can sell the machine for $600 as scrap, what is the NPV at 15 percent? What is the IRR? Discuss.

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