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What is the npv of this project

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Question - Assume we can buy a piece of equipment for 1.5 million dollars and that equipment has a three year life span. Sales from that piece of equipment will be 3.4 million annually with an operating margin of 22% and annual interest of 75,000.00 and a tax rate of 28%. If the salvage value is 150,000.00 what is the NPV of this project when the companies cost of capital is 7%?

If our company can purchase new technology for 650,000.00 and that technology will save us 330,000.00 for three years at which time the new technology will be outdated and our tax rate is 35% should we buy the technology when our cost of capital is 9%.

Reference no: EM133156761

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