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Union Company is contemplating the acquisition of a new computer that will cost the company $19,500. The computer is expected to last 4 years, after which time it will be discarded. Union's cost of capital is 10%, and use of the computer is expected to reduce the company's annual cash operating costs by the following amounts:

-Ignoring income taxes,the net-present-value of the investment in the computer is:

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Union Company is contemplating the acquisition of a new computer that will cost the company $19,500. The computer is expected to last 4 years, after which time it will be discarded. Union's cost of capital is 10%, and use of the computer is expected to reduce the company's annual cash operating costs by the following amounts:
 
-Ignoring income taxes,the net-present-value of the investment in the computer is:

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The net present value (NPV) is calculated by discounting the future cash flows from the investment and subtracting the initial investment cost. The negative value indicates that the investment is not expected to generate a positive return.

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