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0 Fox Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: Year 1 Year 2 Year
0 Fox Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: Year 1 Year 2 Year 3 Year 4 Unit sales Sales price 3,000 3,250 3,300 3,400 $17.25 $17.33 $17.45 $18.24 Variable cost per unit $8.88 Fixed operating costs except depreciation $12,500 Accelerated depreciation rate 33% $8.92 $13,000 45% $9.03 $9.06 $13,220 $13,250 15% 7% This project will require an investment of $15,000 in new equipment. The equipment will have no salvage value at the end of the pr life. Fox pays a constant tax rate of 40%, and it has a weighted average cost of capital (WACC) of 11%. Determine what the projec value (NPV) would be when using accelerated depreciation. Determine what the project's net present value (NPV) would be when using accelerated depreciation. (Note: Round your intermedia the nearest whole number.) O $20,634 $15,476 $19,774 O $17,195 Now determine what the project's NPV would be when using straight-line depreciation. Using the depreciation method will result in the highest NPV for the project. No other firm would take on this princt REC
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