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Continue from the previous question. Company ABC is considering a new 5-year investment into new production equipment that requires initial investment € 5 million. The project is expected to generate

Continue from the previous question. Company ABC is considering a new 5-year investment into new production equipment that requires initial investment € 5 million. The project is expected to generate € 1,4 million in annual sales, with costs of € 0,5 million per year for next 5 years. ABC uses the straight- line depreciation over the 5 years of project life (book value assumed to be zero at the end of the project). The tax rate is 35%. If the project do not require any net working capital and the required return of the project is 8%. What is the project's NPV? Express your answer in millions of euros.

Apr 14 2021 View more View Less

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