Excelsior Company is evaluating the proposed acquisition of a new production machine. The machine's base price...

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Excelsior Company is evaluating the proposed acquisition of anew production machine. The machine's base price is $260,000, andinstallation costs would amount to $28,000. An additional $10,000in net working capital would be required at installation. Themachine has a class life of 3 years. The machine would save thefirm $110,000 per year in operating costs. The firm is planning tokeep the machine in place for 5 years. At the end of the fifthyear, the firm plans to sell the machine for $120,000. The firm hasa required rate of return on investment projects of 12% and amarginal tax rate of 34%. What is the NPV of the project?

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Excelsior Company is evaluating the proposed acquisition of anew production machine. The machine's base price is $260,000, andinstallation costs would amount to $28,000. An additional $10,000in net working capital would be required at installation. Themachine has a class life of 3 years. The machine would save thefirm $110,000 per year in operating costs. The firm is planning tokeep the machine in place for 5 years. At the end of the fifthyear, the firm plans to sell the machine for $120,000. The firm hasa required rate of return on investment projects of 12% and amarginal tax rate of 34%. What is the NPV of the project?