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NikNik NikNik
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5 years ago
ABC Boat Company is interested in replacing a molding machine with a new improved model. The old machine has a salvage value of $10,000 now and a predicted salvage value of $4,000 in six years, if rebuilt. If the old machine is kept, it must be rebuilt in one year at a predicted cost of $20,000.
 
The new machine costs $80,000 and has a predicted salvage value of $12,000 at the end of six years. If purchased, the new machine will allow cash savings of $20,000 for each of the first three years, and $10,000 for each year of its remaining six-year life.

Required:
What is the net present value of purchasing the new machine if the company has a required rate of return of 14%?
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beck98beck98
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5 years ago
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NikNik Author
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5 years ago
Just got PERFECT on my quiz
jodie1
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Yesterday
Helped a lot
Shassta22
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2 hours ago
Thank you, thank you, thank you!
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