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Compute the NPV of the project

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Question - Overnight Laundry is considering the purchase of a new pressing machine that would cost $120,000 and produce incremental operating cash flows of $31,000 annually for 14 years. The machine has a terminal value of $9,000 and is depreciated for income tax purposes using straight-line depreciation over a 14-year life. Overnight Laundry's marginal tax rate is 30%. The company uses a discount rate of 17 per cent. Compute the NPV of the project.

Reference no: EM133114295

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