The manager of a Gym is adding a new treadmill to the gym. The treadmill will cost $2000 to buy and install. The manager

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answerhappygod
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The manager of a Gym is adding a new treadmill to the gym. The treadmill will cost $2000 to buy and install. The manager

Post by answerhappygod »

The manager of a Gym is adding a new treadmill to the gym. The
treadmill will cost $2000 to buy and install. The manager
plans to use the treadmill for 5 years and each year's
depreciation rate is 14% of the purchase price. The manager expects
to sell the treadmill in 5 years for $720.The tax rate is 20%
and the gym's WACC is 7%. If the manager considers this purchase of
treadmill as an investment, what is the NPV?
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