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Question
A machine that costs $1,500,000 has a 3-year life. It will generate after-tax annual cash flows of $700,000 at the end of each year. It will be salvaged for $200,000 at the end of year 3. If your required rate of return for the project is 13%, what is the NPV of this investment?A) $291,417
B) $400,000
C) $600,000
D) $338,395
Answer
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