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Should they go ahead

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Question - Company A is thinking of purchasing a machine that costs $250,000. This will reduce material costs  $90,000 a year for the next 5 years. This will require maintenance of $10,000/yr and can be sold for $50,000 at the end of 5 yr. This project requires working capital of $20,000. ABC has a required rate of return of 9%. Should they go ahead? Why or why not?

Reference no: EM132974483

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