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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 ncrease
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 ncrease with inflation. Fixed costs will also be constant, but variable costs should rise with inflation. The project should last for 3 years. Under the new tax la he equipment used in the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t=0. At the end of the project's life, the equipment vould have no salvage value. No change in net operating working capital (NOWC) would be required for the project. This is just one of many projects for the irm, so any losses on this project can be used to offset gains on other firm projects. What is the project's expected NPV? Do not round the intermediate alculations and round the final answer to the nearest whole number. a. $73,986 b. $105,492 c. $82,539 d. $32,539 e. $123.986
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