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Compute npv and advise management accordingly

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Reference no: EM13925041

Jeremy limited wishes to expand its output by purchasing a new machine worth 170,000 and installation costs are estimated at 40,000/=. In the 4th year, this machine will call for an overhaul to cost 80,000/=. Its expected inflows are:

                             Shs.

  Year 1               60,000

  Year 2               72,650

  Year 3               35,720

  Year 4               48,510

  Year 5               91,630

  Year 6               83,715

This company can raise finance to purchase machine at 12% interest rate.

Compute NPV and advise management accordingly.

Reference no: EM13925041

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