The management of kinion corporation is considering the

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The management of Kinion Corporation is considering the purchase of a machine that would cost $170,000, would last for 7 years, and would have no salvage value. The machine would reduce labor and other costs by $50,000 per year for each of the 7 years. The required rate of return is 16%.

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Required:
1. Determine the net present value of the project.
2. Determine the payback period.
3. Should the company purchase the machine?

Reference no: EM13605420

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