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Type of capital investment

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The Zone Company is evaluating a capital expenditure proposal that requires an initial investment of $3,350,000. The machine will improve productivity and thereby increases net after-tax cash inflows by $785,000 per year for 7 years. It will have no salvage value. The company requires a minimum rate of return of 10 percent on this type of capital investment.

Required:

(A) Determine the net present value (NPV) of the investment proposal

Reference no: EM131114328

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