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Calculate the npv of the project

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Robinson Brothers, Inc. is considering investing in a machine to produce computer keyboards. The price of the machine will be $400,000 and its economic life is four years. The machine will be fully depreciated by the straight-line method. The machine will reduce 10,000 units of keyboards each year. The price of the keyboard will be $50 in the first year of sales and it will increase 5 percent per year. The production cost (excluding depreciation expenses) per unit of the keyboard will be $20 the first year and it will increase at 10% per year. The corporate tax rate for the company is 34 percent.

If the appropriate discount rate is 15 percent, how do I calculate the NPV of the project?

Reference no: EM132248364

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