A company is considering an investment (at time
= 0) in a machine that produces large plastic boxes. The cost of
the machine is 47674 dollars with zero expected salvage value.
Annual production in units during the 3-year life of the machine is
expected to be (starting at time = 1) 4618, 8516, and 11950. The
sale price per unit of the plastic boxes is 10 dollars in year one,
and then expected to increase by 9% per year. Production costs per
unit will be 6 dollars in year one, and then expected to increase
by 5% per year. Depreciation on the machine is 11777 dollars per
year, the tax rate is 40% and the minimum acceptable rate of return
is 6% percent. Calculate the net present value of this investment.
Assume all flows are at the end of each year. (note: round your
answer to the nearest cent, and do not include spaces, currency
signs, plus or minus signs, or commas) Answer= 27994.18

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