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ABC Co is considering a project which will require the purchase of $1.4 million in new equipment. Annual sales from this project are estimated at
ABC Co is considering a project which will require the purchase of $1.4 million in new equipment. Annual sales from this project are estimated at $1.2 million. Net working capital equal to 25% of sales will be required to support the project. The firm desires a minimal 14% rate of return on this project. The tax rate is 34%. What is the recovery amount attributable to net working capital at the end of the project?
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