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6. (25 Marks) A new shoe production line is being designed at a cost of $230,000 and operating costs are expected to be $75,000 per
6. (25 Marks) A new shoe production line is being designed at a cost of $230,000 and operating costs are expected to be $75,000 per year. Planned annual production is 3700 pairs and the price of a pair of shoes is $90. The line's service life is 7 years, the depreciation rate is 30%. Assuming a 14% annual interest rate for the base case, perform a sensitivity analysis with respect to the interest rate in the interval [-20%, -10%, +10%, +20%] in terms of present worth. Comment on your results briefly, are there any conditions under which this would not be a good investment
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