Calculate the npv of the project

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Firm X is to build a new system that will cost $560,000 now. It will depreciate to zero over a five year project life using straight line depreciation method. The system can be sold for $85,000 at the end of the project life. The system requires initial investment in new working capital of $29,000. The system will have a pretax saving of $165,000 per year. The net working capital can be recovered at the end of the project. Calculate the NPV of the project using 34 percent discount rate.

Reference no: EM132014683

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