What is the net present value of the investment

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Problem - Pique Corporation wants to purchase a new machine for $303,000. Management predicts that the machine can produce sales of $216,000 each year for the next 5 years. Expenses are expected to include direct materials, direct labor, and factory overhead (excluding depreciation) totaling $71,000 per year. The ?rm uses straight-line depreciation with no residual value for all depreciable assets. Pique's combined income tax rate is 40%. Management requires a minimum after-tax rate of return of10% on all investments. What is the net present value (NPV) of the investment, rounded to the nearest whole dollar?

Reference no: EM132750398

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