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McClary Custom Printers is considering whether to purchase a printer. The printer costs $200,000 to...

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Accounting

McClary Custom Printers is considering whether to purchase a printer. The printer costs $200,000 to purchase, and McClary expects it can earn an additional $1.2 million in cash flows in the printer's first year of use. However, there is a problem with purchasing the printer today because it will require a very large expenditure in year 2, such that year 2's cash flow is expected to be -$2.2million. Finally, in year 3, the printer investment is expected to produce a cash flow of $1.2 million. Evaluate, using the appropriate method, whether the printer purchase will be worthwhile. Why have you chosen this method? Can you use more than one method of investment evaluation to answer this? If yes, show those methods and assess differences in their results.

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