answers:

43,635

42,451

41,276

40,111

38,955

D Question 17 1 pts Desai Industries is analyzing an average-risk project, and the following data have been developed. Unit sales will be constant, but the sales price should increase with inflation. Fixed costs will also be constant, but variable costs should rise with inflation. The project should last for 3 years, it will be depreciated on a straight-line basis, and there will be no salvage value. This is just one of many projects for the firm, so any losses can be used to offset gains on other firm projects. What is the project's expected NPV if the project's cost of capital is 4.50%? Net investment cost (depreciable basis) $200,000 Units sold 50.000 Average price per unit, Year! $25.00 Fixed op cost excl. deprec. constant) ID $150,000 Variable op. cost/unit Year 1 $20.20 Annual depreciation rate 33.33% Expected inflation rate per year 5.00% Tax rate 40.0%