Question: CCC Inc. is considering a 3-year project with an initial cost of $745,000. The project will not directly produce any sales but will reduce operating

CCC Inc. is considering a 3-year project with an initial cost of $745,000. The project will not directly produce any sales but will reduce operating costs by $205,000 a year. The equipment is depreciated straight-line to a zero book value over the life of the project. At the end of the project the equipment will be sold for an estimated $30,000. The tax rate is 35%. The project will require $35,000 in extra inventory for spare parts and accessories. Calculate the NPV. Should this project be implemented if CCC requires an 9% rate of return? Why or why not?

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