Cost of capital for quick printing
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Quick Printing is considering buying a new printing press. The press will cost $150,000 and the machine can be sold for $30,000 in year 5. The machine is expected to increase net cash flow (revenues less operating expenses) by $35,000 each year for five years and then the machine will be sold. Quick's cost of capital is 12%. Should Quick purchase the machine? Please show all you work.
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Solution Summary
This solution determines whether Quick Print should purchase a new printing press.
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