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Initial advertising and marketing expenses = $1,160,000 Initial cost (price tag) of new equipment (assume 5-year SL) = $400,000 Investment in training completed last year = $200,000 Incremental sales

Initial advertising and marketing expenses = $1,160,000
Initial cost (price tag) of new equipment (assume 5-year SL) = $400,000
Investment in training completed last year = $200,000
Incremental sales volume expected (in units, years 1-3) = 100,000
Incremental sales volume expected (in units, years 4-6) = 120,000
Selling price per unit = $30
Cost to manufacture (per unit) = $16
Other incremental cash expenses (years 1-6) = $400,000
Project salvage value end of year 6 = $50,000
Corporate tax rate = 34%
Corporate cost of capital = 14%

What is the Initial Investment for this venture?
What is the Depreciable Base for the project?
What is the 3rd year's operatinv cash flow [OCF(3)]?
What is the 4th year's operatinv cash flow [OCF(4)]?
What is the project's net Terminal Value?
What is the project's NPV?
What is the project's IRR?
What is the project's MIRR?

 

Jul 02 2021 View more View Less

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