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Cashlow, IRR & NPV

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The Cigar Candy Company is considering a new machine that would increase the firm's earning before taxes and depreciation by $99,700 for eight years. The machine would cost $529,000, last eight years, have no salvage value and would be classified as five year class property for MACRS. The firm's marginal tax rate is 40%. The firm's cost of capital and hurdle rate is 12.8%

Required:
1. Determine annual cash inflows
2. Determine the IRR and net present value of the project.

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The response discusses computation of Cashlow, IRR and NPV.

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Cashlow, IRR & NPV

The Cigar Candy Company is considering a new machine that would increase the firm's earning before taxes and ...

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