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A firm with required rate of return 10% and tax rate 20% evaluates the following 3 -year investment plan: Initial investment is $30,000 depreciated linearly

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A firm with required rate of return 10% and tax rate 20% evaluates the following 3 -year investment plan: Initial investment is $30,000 depreciated linearly to zero, project is expected to sell 1,000 additional units for $30 each. The variable cost is $10/ unit and the project has also a fixed cost of $5,000/ year. 1. Estimate the NPV of the project. 2. Do a sensitivity analysis on price, estimating the NPV for $25 and $35. 3. Do a sensitivity analysis on initial investment, estimating the NPV if the initial investment is $24,000 or $36,000

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