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Assume NRG originally forecasted its marketing and support costs at $500,000 per year during years 1-3. Suppose the marketing and support costs could be as
Assume NRG originally forecasted its marketing and support costs at $500,000 per year during years
1-3. Suppose the marketing and support costs could be as low as $400,000 or as high as $800,000
per year. How would these changes impact the NPV of the proposed energy drink project? Recall,
NRG pays a 29% tax rate on its pre-tax income. Assume their cost of capital is 10%.
Select one:
a. $223,657 and -$580,326 respectively.
b. $176,566 and -$529,699 respectively.
c. $463.227 and -$617,636 respectively.
d. -$463,227 and $617.636 respectivel
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