Finance Problem for a MBA level
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The problem:
You are considering a machine that will cost $ 50,000 and which can be sold after 3 years for $10,000. $12,000 must be invested in working capital and will be recovered after year 3. Sales will be $ 50,000 a year. Operating costs will be 40% of sales. Depreciation will be $ 40,000,
$5,000 and $5,000 each year. The tax rate is $ 40%. The r is 15%. What is the NPV?
Please explain in details the steps of solving this problem and please attach any Excel sheets.
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Solution Summary
The expert examines the NPV for tax rates.
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