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Long Inc. Is analyzing a $1 million Investment in new equipment to produce a product with a $5 per unit margin. The equipment will last 5 years, be depreciated on a straight-line basis for tax purposes, and have no value at the end of its life. A study of unit sales produced the following data. Annual Unit Sales 80,000 85,000 90,000 95,000 100,000 110,000 If Long utilizes a 12% hurdle rate and is subject to a 40% effective Income tax rate, the expected net present value of the project would be Multiple Choice O о Probability 0.10 0.20 0.30 0.20 0.10 0.10 O $261,750 $283,380 $297,800 $427,580 K 20 Next Please don't provide answer in image format thank you

Long Inc. Is analyzing a $1 million Investment in new equipment to produce a product with a $5 per unit margin. The equipment will last 5 years, be depreciated on a straight-line basis for tax purposes, and have no value at the end of its life. A study of unit sales produced the following data. Annual Unit Sales 80,000 85,000 90,000 95,000 100,000 110,000 If Long utilizes a 12% hurdle rate and is subject to a 40% effective Income tax rate, the expected net present value of the project would be Multiple Choice O о Probability 0.10 0.20 0.30 0.20 0.10 0.10 O $261,750 $283,380 $297,800 $427,580 K 20 Next Please don't provide answer in image format thank you

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter15: Capital Investment Analysis
Section: Chapter Questions
Problem 15.1.1MBA
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Long Inc. Is analyzing a $1 million Investment in new equipment to produce a product with a $5 per unit margin. The equipment will last 5 years, be depreciated on a straight-line basis for tax purposes, and have no value at the end of its life. A study of unit sales produced the following data. Annual Unit Sales 80,000 85,000 90,000 95,000 100,000 110,000 If Long utilizes a 12% hurdle rate and is subject to a 40% effective Income tax rate, the expected net present value of the project would be Multiple Choice O о Probability 0.10 0.20 0.30 0.20 0.10 0.10 O $261,750 $283,380 $297,800 $427,580 K 20 Next

 

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Long incenalyzing a $1mmon vestment in new equement to produce a orodact with a 30 per un magn. The autoren wirst value at the end of its the A study of unit sales produced the futiowing data Annual unit Sales 00,000 65,000 90,000 95,000 100,000 110,000 Probability 0.10 0.20 0.30 9.20 0.10 0.10 If Long unizes a 12% hurdle rate and is subject to a 40% effective come tax rate, the expected set present vake of the project wo Multiple Choice $281.380 O $27.00 $427560 ned in 4 oreigntine basis for a speses, and have
Transcribed Image Text:Long incenalyzing a $1mmon vestment in new equement to produce a orodact with a 30 per un magn. The autoren wirst value at the end of its the A study of unit sales produced the futiowing data Annual unit Sales 00,000 65,000 90,000 95,000 100,000 110,000 Probability 0.10 0.20 0.30 9.20 0.10 0.10 If Long unizes a 12% hurdle rate and is subject to a 40% effective come tax rate, the expected set present vake of the project wo Multiple Choice $281.380 O $27.00 $427560 ned in 4 oreigntine basis for a speses, and have
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