Question: Consider a machine that will reduce after-tax operating costs by $2,500 per year over a five-year period. Assume no changes in net working capital and

Consider a machine that will reduce after-tax operating costs by $2,500 per year over a five-year period. Assume no changes in net working capital and a salvage value of $10,000. Further assume that the machine belongs in a 20% CCA class, a marginal tax rate of 35%, and a required return of 12%. The machine costs $15,000. What is the project NPV? Will it be accepted or not?

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