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A firm can invest $5 million in a new food processing plant. The plant has an expected life of 20 years and expected sales of
A firm can invest $5 million in a new food processing plant. The plant has an expected life of 20 years and expected sales of 6 million food cans a year. Fixed costs are $2 million a year and variable costs are $1 per can. The product will be priced at $2 per can. A corporate tax rate is 40% and a MARR is 10%. What would the project's Net Present Worth be if variable costs increased by 20%? $9.3 million $30.8 million $14.5 million $11.8 million $13.8 million
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