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Road Hawk Inc. is adding a new production line that will cost $720,000.

8. Road Hawk Inc. is adding a new production line that will cost $720,000. The line will be
depreciated on a straight-line basis over a 7-year period and will generate net cash flows of
$160,000 in each of the 7 years. At the end of the project, it is expected the line can be sold as
scrap for $10,000. If the firm's marginal tax rate is 40% and it's required rate of return is 14
percent, what is the net present value of this project?

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