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5. Sofitel Ltd. is considering a five-year project to expand its production efficiency. Building a new plant for $1,000,000 at the beginning of the project

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5. Sofitel Ltd. is considering a five-year project to expand its production efficiency. Building a new plant for $1,000,000 at the beginning of the project is estimated to result in annual sales quantity of 50.000 at a unit price of $24 and $800,000 total costs annually. The plant will be depreciated equally per year to $150,000 book value when the project ends and it can be sold for $100,000 at that time. It also requires an initial investment of $30,000 in net working capital at the beginning of the project. Applicable tax rate is 20% and the discount rate is 18%. Should the company undertake the project (Show your calculations and fill in the following table)? (20 Points) 01 3 5 OCF Ain NWC NES CFFA

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