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Calculating inflation and project cash flows) Carlyle Chemicals is evaluating a new chemical compound used in the manufacture of a wide range of consumer
Calculating inflation and project cash flows) Carlyle Chemicals is evaluating a new chemical compound used in the manufacture of a wide range of consumer products. The Sm is concerned that intation in the cost of raw materials will have an adverse effect on the projects cash flows Specifically, the film expects that the cost per unit (which is curently 50.90) wil re at a rate of 12 percent annually over the next three years. The per-unt selling price is grenity 50.03, and price is expected to rise at a meager 3 percent annual rate over the next three years. If Carlyle expects to sell 6.5, 6.8, and 10 milion units for the next three years, respectively, what is your estimate of the fimis gross profits? Based on the estimate, what recommendation would you offer to the firm's management with regard to this product? (Note: Be sure to round each unit price and unit cost per year to the nearest cent The green profit or poss) for year 1 found to the nearest dotar)
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