1 a project has an initial investment of 35 million which, Ask an Expert

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1. A project has an initial investment of $3.5 million, which will be straight-line depreciated to zero over five years (which is the life of the project). Each year there are $450,000 in fixed costs. The price per unit is $75 of which $35 are variable costs. The appropriate discount rate for this project is 17.3%, and the tax rate is 34%.

2. Referring back to #2, consider the scenario in which sales is projected to be 51,000 units, but the price per unit is only $68. Find the NPV under this scenario.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92305950

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