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An eight-year project requires $18 million in initial investment depreciated on a straight-line basis over its 12-year useful life has a required rate of return
An eight-year project requires $18 million in initial investment depreciated on a straight-line basis over its 12-year useful life has a required rate of return of 12% per year. The project will produce a consumer good that can be sold for $24/unit, with a $14/unit variable cost, and $8,000,000 fixed costs. At the end of year eight the fixed assets of the project can be liquidated for $8,000,000. The applicable tax rate is 25%. Calculate the NPV break-even annual dollar cash flows for this project.
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