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Title: A large printing company is considering purchasing a new printing press to replace the existing one ... Post by: Melly767 on Mar 24, 2024 A large printing company is considering purchasing a new printing press to replace the existing one that cost the company $1 million five years ago. The new machine will cost the company $1.8 million, has an economic life of ten years, and an expected salvage value of $150,000. The old machine can be sold for $200,000 today or could be sold for $10,000 in ten years. Both machines have a CCA rate of 30% and the asset class will remain open and the half-year rule applies in the first year. The company projects that operating profit will increase by $400,000 per year. The company's tax rate is 40% and the cost of capital is 12%. What is the NPV of the replacement decision?
▸ $223,204 ▸ $274,066 ▸ $224,124 ▸ $277,285 Title: Re: A large printing company is considering purchasing a new printing press to replace the existing one ... Post by: benschmann on Mar 24, 2024 Content hidden
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