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answer from book is : NPV = $3,136.06 Can you explain this in table please not excel , im trying to understand the problem. Big
answer from book is : NPV = $3,136.06
Can you explain this in table please not excel , im trying to understand the problem. Big thumbs up.
9 You are asked to evaluate the following project for a corporation with profitable ongoing operations. The required investment on January 1 of this year is $56,000. The firm will depreciate the investment at a CCA rate of 20 percent. The firm is in the 40 percent tax bracket. The price of the product on January 1 will be $320 per unit. That price will stay constant in real terms. Labour costs will be $14 per hour on January 1 . They will increase at 1 percent per year in real terms. Energy costs will be $7.35 per physical unit on January 1; they will increase at 2.5 percent per year in real terms. The inflation rate is 6 percent. Revenue is received and costs are paid at year-end: The risk-free nominal discount rate is 7 percent. The real discount rate for costs and revenues is 4 percent. Calculate the NPV of this projectStep by Step Solution
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