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A company will sell Thingamabobs to consumers at a price of $103 per unit. The variable cost to produce Thingamabobs is $44 per unit. The

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A company will sell Thingamabobs to consumers at a price of \$103 per unit. The variable cost to produce Thingamabobs is \$44 per unit. The company expects to sell 10,000 Thingamabobs to consumers each year. The fixed costs incurred each year will be $220,000. There is an initial investment to produce the goods of $2,500.000 which will be depreciated straight line over the 20 year life of the investment to a salvage value of $0. The oppertunity cost of capital 19 6% and the tax rate is 33%. Using the an annual operating cash flow of $289,150, what is the net present value of this investment? Should the company accept or reject this project? Accept Reject

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