Calculate the net present value for the special-purpose

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Question - Homecare, a tax-paying organisation that provides meals to the disadvantaged, estimates that it can save $16,000 a year in cash operating costs for the next 8 years if it buys a special-purpose oven at a cost of $96,000.  No terminal disposal value is expected.  The required rate of return is 4%. Assume all cash flows occur at year-end except for initial investment amounts. Calculate the net present value for the special-purpose oven considering income tax rate of 30%.

Reference no: EM133115514

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