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Compute the net investment for this project

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Reference no: EM133168124

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 $560,000 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 $10,000. Both of the old machines can be sold-the first for $80,000 (book value equals $65,000) and the second for $160,000 (book value equals $110,000). The original cost of the first machine was $180,000, and the original cost of the second machine was $150,000. The firm's marginal tax bracket is 40 percent. Compute the net investment for this project.

Reference no: EM133168124

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