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• Due on Dec. 04, 2011
• Asked on Dec 03, 2011 at 6:36:30PM

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Q:

A manufacturing company is thinking of launching a new product. The company expects to sell \$950,000 of the new product in the first year and \$1,500,000 each year thereafter. Direct costs including labor and materials will be 55% of sales. Indirect incremental costs are estimated at \$80,000 a year. The project requires a new plant that will cost a total of \$1,000,000, which will be a depreciated straight line over the next 5 years. The new line will also require an additional net investment in inventory and receivables in the amount of \$200,000.

Assume there is no need for additional investment in building the land for the project. The firm's marginal tax rate is 35%, and its cost of capital is 10%.

Get the NPV  --  do it the long way, so I can see how it's done. PLEASE

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• Posted on Dec 03, 2011 at 6:51:32PM
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A:
Preview: ... e long way ...

The full tutorial is about 9 words long plus attachments.

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NPV.xlsx (10K)

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The NPV =\$1,075,689 ( for the project over an 8 - year period )
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• Posted on Dec 03, 2011 at 7:22:21PM
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A:
Preview: ... ,689 ( for t ...

The full tutorial is about 14 words long plus attachments.

Attachments: