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Compute the net present value of the machine

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Point 1: A company is considering the purchase is a machine that cost $250,000. The machine is expected to generate revenue of $85,000 per year for five years. The machine would be deprecated using a straight line method over a five year life and have no salvage value. The company considers the impact of taxes on all investment decisions. The company has a 40 percent tax rate and desires an after tax return of 12% on its investment.

Question 1: Compute the net present value of the machine?

Reference no: EM132510887

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