Calculate the npv of this investment using excel spreadsheet

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Reference no: EM131536324

Mary's Little Lamb, Inc. is analyzing the proposed purchase of a new machine for $ 2,000,000 The proposed machine has an estimated economic life of four years but will be treated as three-year MACRS property for depreciation purposes. The machine will increase the firm's capacity, and it is expected to contribute $910,000 annually to earnings before depreciation, interest and taxes. The firm is in a 30% tax bracket and estimates its cost of capital to be 15%. Calculate the NPV of this investment using an Excel spreadsheet. Show and label your work. Formulas for NPV and 1RR are preprogrammed in Excel.

Reference no: EM131536324

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