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Farm Fresh, Inc is looking at another project with the base case estimate of variable values below. If the tax rate is 40%, the project

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Farm Fresh, Inc is looking at another project with the base case estimate of variable values below. If the tax rate is 40%, the project costs $200,000 depreciated straight line over the 4 year project life (with no salvage value) and the WACC is 15%, determine whether the project's NPV is sensitive to the variable costs by changing it by 10% in either direction. Show all computations and justify your answer. Variable Sales Units Sales Price Variable Cost Fixed Cost Base Case Estimate 2000 $100 $ 50 $10,000

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