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You have been hired as a financial consultant by JM Corp. JM Corp. is considering investing...

You have been hired as a financial consultant by JM Corp. JM Corp. is considering investing in a new machine to produce dog biscuits. JM Corp. has provided you with the following information:

*Full price of machine is $125,000.

*The machine will not require any modification or increase in net working capital.

*PJ has a 35% marginal tax rate.

*The machine falls into the MACRS 3-year class.

*JM will use the machine for 5 years and then plans to sell it for $16,000 at the end of year 5.

*The machine is expected to increase earnings before depreciation by $35,000 a year for the life of the machine.

*PJ has a WACC of 11%.

Create a spreadsheet in Excel providing this data and calculate the NPV as well.

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