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Q) Your corporation is considering replacing older equipment.  The old machine is fully depreciated and cost  $53,633.00  seven years...

Q) Your corporation is considering replacing older equipment.  The old machine is fully depreciated and cost  $53,633.00  seven years ago.  The old equipment currently has no market value. The new equipment cost $55,937.00 .  The new equipment will be depreciated to zero using straight-line depreciation for the four-year life of the project. At the end of the project the equipment is expected to have a salvage value of $14,087.00 .  The new equipment is expected to save the firm $15,718.00  annually by increasing efficiency and cost savings.  The corporation has tax rate of  29.85%  and a required return on capital of  10.02% .          

a) What is the total initial cash outflow? (show as negative number )    

b) What are the estimated annual operating cash flows?   

c) What is the terminal cash flow?      

d) What is the NPV for this project?

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