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    Calculating the NPV for a new machine

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    A company is looking to add a new machine at a cost of $4,133,250. The company expects this equipment will lead to cash flows of $817,322, $863,275, $937,250, $1,018,610, $1,212,960, and $1,225,000 over the next six years. If the appropriate discount rate is 15 percent, what is the NPV of this investment?

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    Solution Preview

    Discount rate=r=15%
    Initial cash flow=CF0=-$4,133,250
    Cash Flow at the end of year 1=CF1=817,322
    Cash Flow at the end of year ...

    Solution Summary

    The solution depicts the steps to calculate the NPV in the given case.