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X Company is thinking about expanding the production of Product X...

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Accounting

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X Company is thinking about expanding the production of Product X and eliminating Product Y. Expanding sales of X should result in additional firm profits of $12,000 per year for the next 5 years, but will require the purchase of some additional equipment, costing $16,000. This equipment should be worth $3,700 at the end of 5 years. By eliminating Product Y, the firm will lose the product's $4,000 annual contribution margin but will save $11,000 of annual fixed costs. Assuming a discount rate of 4%, what is the net present value of expanding the production of Product X and eliminating Product Y ? Tries 0/99

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