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A firm is considering a nine-year project that requires an initial investment in fixed assets of $630.  The fixed asset will be depreciated straight line to zero over the life of the project.  At the end of the project the asset will be sold for $180.  The project is expected to generate $950 in annual sales with annual cost of goods sold of $400.  The tax rate is 30% and the discount rate is 10%.  Find the net present value of the project.   a.)$1650 b.)$1760 c.)$1770 d.)$1730 e.)$1710 f.)$1720

A firm is considering a nine-year project that requires an initial investment in fixed assets of $630.  The fixed asset will be depreciated straight line to zero over the life of the project.  At the end of the project the asset will be sold for $180.  The project is expected to generate $950 in annual sales with annual cost of goods sold of $400.  The tax rate is 30% and the discount rate is 10%.  Find the net present value of the project.   a.)$1650 b.)$1760 c.)$1770 d.)$1730 e.)$1710 f.)$1720

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter26: Capital Investment Analysis
Section: Chapter Questions
Problem 2CMA: Staten Corporation is considering two mutually exclusive projects. Both require an initial outlay of...
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A firm is considering a nine-year project that requires an initial investment in fixed assets of $630.  The fixed asset will be depreciated straight line to zero over the life of the project.  At the end of the project the asset will be sold for $180.  The project is expected to generate $950 in annual sales with annual cost of goods sold of $400.  The tax rate is 30% and the discount rate is 10%.  Find the net present value of the project.

 

a.)$1650
b.)$1760
c.)$1770
d.)$1730
e.)$1710
f.)$1720
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