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You just finished analyzing a five-year capital investment proposal that has a NPV of $250,000. Suddenly, you get a frantic call from the VP of Operations saying the initial investment in equipment will be $275,000 more than first thought, but the change won't effect the salvage value estimate. What is your revised NPV? The equipment is 3-year MACRS property, your company has a 35% marginal tax rate, and a 7.7% cost of capital.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92085646

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