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Aunt Sally s Sauces Inc., is considering expansion into a new line of all - natural, cholesterol - free, sodium - free, fat - free,
Aunt Sallys Sauces Inc., is considering expansion into a new line of allnatural, cholesterolfree, sodiumfree, fatfree, lowcalorie tomato sauces. Sally has paid $ for a marketing study which indicates that the new product line would have sales of $ per year for the next six years. Manufacturing plant and equipment would cost $ and will be depreciated using the following annual depreciation rates: The fixed assets will have no market value at the end of six years. Annual fixed costs are projected at $ and variable costs are projected at of sales. Net operating working capital requirements are $ for the sixyear life of the project; the outlay for working capital will be recovered at the end of six years. Aunt Sallys tax rate is and the firm requires a return. The NPV of this project is $
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