Question: Whats the projects NPV? Also Do we accept or reject this project? A manufacturer of paper and paper board is considering the replacement and upgrading
Whats the projects NPV? Also Do we accept or reject this project?
A manufacturer of paper and paper board is considering the replacement and upgrading of machinery that would improve efficiency. The new machinery costs $350 and is expected to last for 5 years with no salvage value. Straight line depreciation will be used. Cash inflows connected with the new machinery are expected to be $200 each year and cash outflows are expected to be $80 each year. If the tax rate is 36%, and if the required rate of return is 8%, what is the project's net present value
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