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X Corp plans to invest in new equipment costing 290,000 with no salvage value. The project will save 160,000 in cash operating cost for each of the next 3 years, at which time the machine can still be sold at 40,000 cash (even if the machine is fully depreciated). Tax rate is 40%. The minimum desired rate of return is 16%. Assuming that at the end of year 2, overhaul cost to be incurred by X is 5,000 (tax deductible). SLM is used for tax purposes. Pls use up to 4 decimal places for the PVF. What is the NPV? A• 17,573.20 B• 8,589.60 C• 5,114.20 D• 9,231.40

X Corp plans to invest in new equipment costing 290,000 with no salvage value. The project will save 160,000 in cash operating cost for each of the next 3 years, at which time the machine can still be sold at 40,000 cash (even if the machine is fully depreciated). Tax rate is 40%. The minimum desired rate of return is 16%. Assuming that at the end of year 2, overhaul cost to be incurred by X is 5,000 (tax deductible). SLM is used for tax purposes. Pls use up to 4 decimal places for the PVF. What is the NPV? A• 17,573.20 B• 8,589.60 C• 5,114.20 D• 9,231.40

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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X Corp plans to invest in new equipment costing 290,000 with no salvage value. The project will save 160,000 in cash operating cost for each of the next 3 years, at which time the machine can still be sold at 40,000 cash (even if the machine is fully depreciated). Tax rate is 40%. The minimum desired rate of return is 16%. Assuming that at the end of year 2, overhaul cost to be incurred by X is 5,000 (tax deductible). SLM is used for tax purposes. Pls use up to 4 decimal places for the PVF. What is the NPV?

A• 17,573.20
B• 8,589.60
C• 5,114.20
D• 9,231.40
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