You are considering investing in a piece of equipment to implement a cost-cutting proposal. The pre-tax...

You are considering investing in a piece of equipment to implement a cost-cutting proposal. The pre-tax cost reduction is expected to equal $41.67 for each of the three years of the project's life. The equipment has an initial cost of $125 and belongs in a 20% CCA class. Assume a 34% tax bracket, a discount rate of 15%, and a salvage value of zero. If the equipment is sold to another company at the end of year 3 for $20, what is the NPV?

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jeff jeffy answered 1 year ago

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