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What is the project NPV

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Question - FITCO is considering the purchase of new equipment. The equipment costs $342000, and an additional $112000 is needed to install it. The equipment will be depreciated straight-line to zero over a 5-year life. The equipment will generate additional annual revenues of $263000, and it will have annual cash operating expenses of $85000. The equipment will be sold for $81000 after 5 years. An inventory investment of $72000 is required during the life of the investment. FITCO is in the 40 percent tax bracket, and its cost of capital is 10 percent. What is the project NPV?

Reference no: EM132993339

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