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Business, 12.08.2020 06:01 ayshajabeenmeox5jrh

A cloth manufacturing firm is deciding whether or not to invest in new machinery. The machinery costs $45,000 and is expected to increase cash flows in the first year by $25,000 and in the second year by $30,000. The firm’s current fixed costs are $9,000 and current marginal cost are $15. The firm currently charges $18 per unit. Required:
If the interest rate is 5% then. what is the present value of the cash flows?

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