Calculate the incremental net present value, Finance Basics

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The following NPV's have been calculated to determine if a compressor installation should be accelerated from Year 3 to Year 7. The compressor cost is $1,500,000.

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a. Calculate the incremental NPV's for this project using the tabled data.

b. If capital is limited and your average reinvestment opportunity rate is 15%, what is your recommendation regarding acceleration of the project?

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