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The Potash Corporation is considering an investment project for which the following data are available: Cost of equipment need.$550,000 Estimated...
The Potash Corporation is considering an investment project for which the following data are available:Cost of equipment need.............$550,000Estimated annual net income for 10 years............49,000Cost of overhaul of equipment needed in 6 years............50,000Salvage value of equipment in 10 years............70,000Cost of Capital........................10%1. How much is annual depreciation?2. How much is net cash inflow?3. Calculate NPV and make a decision.4. Should they invest? Why or why not? What is the most they should pay?
