Mars INC is considering the purchase of a new machine which will reduce manufacturing costs by 5000 annually. Mars will use MACRS accelerated method to depreciate the machine, and its expects to sell the machine at the end of its 5-year operating life 10000. The firm expects to be able to reduce net working capital by 15,000 dollars when the machine is installed but required working capital will return to the original level when the machine is sold after 5 years. Mars marginal tax rate is 4 percent, and its uses a 12 percent required rate of return to evaluate projects of this nature. If the machine costs 60,000 dollars, what is the NPV of the project.
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