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Doodabble Company is considering the purchase of production equipment that costs $960000. The equipment is...

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Accounting

  1. Doodabble Company is considering the purchase of production equipment that costs $960000. The equipment is expected to generate an annual cash flow of $280000 and have a useful life of 7 years with no salvage value. The firm's cost of capital is 11 percent. The straight-line method with no mid-year convention is used.

  2. 40 Ignoring income taxes, the net present value of the project is

    1. A $359,400

    2. B $1,000,000

    3. C ($212,200)

    4. D $212,200

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