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What is the npv if the discount rate is thirteen percent

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Problem 1: XYZ Inc. can reduce its operating costs by $162,500 every year with a purchase of new equipment for $350,000. The depreciation is straight-line to a zero book value over the project's life of 3 years. At the end of three years, the equipment will be sold for $40,000. The new equipment will require additional spare parts inventory of $18,000 for each of the 3 years. What is the NPV if the discount rate is 13.5% and the tax rate is 22 percent?

Reference no: EM132869350

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