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Angola Superheros, Inc. is considering launching a production of a new superhero toy. The production and sales are expected to last 4 years. The project
Angola Superheros, Inc. is considering launching a production of a new superhero toy. The production and sales are expected to last 4 years. The project would require a new machine, with a cost of $1,000,000. The machine is expected to be sold for $300,000 at the end of the project. The company estimates that 40,000 toys would be sold annually, with a $15 contribution margin per unit (the difference between the selling price and the variable cost per unit). In addition, the company will have to pay fixed costs equal to $35,000 each year. The minimum attractive rate of return is 13%. (Note: You will need to provide a written answer for part a, and written comments discussing the results of your analysis in part b.) (Note: Do not include the selling price or the variable cost per unit in your analysis. Also, you will need to work with the total contribution to profits for all units, and fixed costs, instead of Revenues and Costs.) a) Compute the project's cash flows for years 0-4, calculate the present worth, annual worth, and the rate of return of the project, and determine whether the project should be accepted, based on the information given (disregarding any sensitivity analysis). Explain your
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