Question: Daily Enterprises is purchasing a $13,000,000 machine. The machine will be depreciated using straight-line depreciation over its 5 year life and will have no salvage

Daily Enterprises is purchasing a $13,000,000 machine. The machine will be depreciated using straight-line depreciation over its 5 year life and will have no salvage value. The machine will generate revenues of $10,000,000 per year along with fixed costs of $3,000,000 per year.

If Daily's marginal tax rate is 34%, the discount rate is 12%, what is the NPV of the project? The cash flow each year is $5,504,000.

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