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Define net present value of the investment

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Reference no: EM13509146

The management of Ocala Company is considering the purchase of a $25,000 machine that would reduce operating costs by $4,000 per year. At the end of the machine's 10 year useful life, it will have a zero salvage value. The company requires a 14% on all investment projects.

Required:

a) Net present value of the investment

b) Difference between the total, undiscounted, cash inflows and cash outflows, over the entire life of the machine.

Reference no: EM13509146

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