[Get Answer ]-Financial Managment For Small Business

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Question Description

You are a small business owner and you have theopportunity to expand your facility, which will increase yourproduction capacity over the next 5 years.  The expansion will cost$60,000 and additional equipment will cost another $20,000.

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  • Additional profits after tax willamount to $18,000 per year.  Your cost of capital is 8%.  Should you goahead with the expansion?  Why or why not?  HINT: Use NPV.

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