Project life is expected to be 10 years from the project inception, at which time the proposed system will be obsolete and will have to be replaced. It is estimated that the machinery has a salvage value of $35,000. The interest rate is expected to be 3% for the entire period of time (all 10 years). What is the Net Present Value (NPV) and the Internal Rate of Return (IRR) of this project? Part 2 (Learning Cure Analysis) A manufacturer of diesel locomotives needs 50,000 hours to produce the first unit. Based on past experience with similar products, you know that the rate of learning is 80 percent. Estimate the direct labor required for the 40th diesel locomotive and the cumulative average number of labor hours per unit for the first 40 units.
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