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Should the equipment be purchased

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Reference no: EM132965531

COOL X INC. is considering purchasing new Machinery at a cost of $1,650,00. It is expected to save $240,000 in cash operating costs per year. Its estimated useful life is 10 years and it will have a salvage value of $200,000 . The required rate of return is 8%.

Problem a. Net Present Value?

Problem b. Payback Period?

Problem c. Accrual Accounting Rate of Return?

Problem d. Should the equipment be purchased ? Explain your answer.

Reference no: EM132965531

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