Calculate NPV of this investment using an Excel spreadsheet

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Whoopie Cushions, Inc. is analyzing the proposed purchase of a new machine for $550,000. The proposed machine has an estimated economic life of six years but will be treated as five-year MACRS property for depreciation purposes. The machine will increase the firm's capacity, and it is expected to contribute $176,000 annually to earnings before depreciation, interest and taxes. The firm is in a 30% tax bracket and estimates its cost of capital to be 16%. Calculate the NPV of this investment using an Excel spreadsheet. Show and label your work. Formulas for NPV and IRR are pre programmed in Excel.

Reference no: EM13943780

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