URI corporation can invest 10 milion dollers in a new mechine, the machine has an expected life
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Question:
URI corporation can invest 10 milion dollers in a new mechine, the machine has an expected life of 10 years. and the expected increase in sales volum is 5 milion per year. Fixed costs will increase by 1 million a year, and variable costs are 1 doller per quantity sold. the product price is $5 each. the machine is depreciable on a declining balance basis over 10 years to a salvage value of 1 million. the opprtunity cost of captial is 15% and tax rae is 40%
what is project NPV, and NPV break-even price
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