Compute the net investment for this project

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Question - A firm has an opportunity to invest in a new device that will replace two of the firm's older machines. The new device costs $500,000 and requires an additional outlay of $20,000 to cover installation and shipping. The new device will cause the firm to increase its net working capital by $30,000. Both of the old machines can be sold-the first for $120,000 (book value equals $105,000) and the second for $140,000 (book value equals $130,000). The original cost of the first machine was $220,000, and the original cost of the second machine was $130,000. The firm's marginal tax bracket is 40 percent. Compute the net investment for this project.

Reference no: EM132921074

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