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Former Green Bay Packers defensive tackle, Don Davey, is considering opening a Firehouse Sub Shop in Wauwatosa, Wisconsin. The new Fireside Sub Shop will require
Former Green Bay Packers defensive tackle, Don Davey, is considering opening a Firehouse Sub Shop in Wauwatosa, Wisconsin. The new Fireside Sub Shop will require new sandwich-grilling equipment costing $547,000 that would be depreciated on a straight-line basis to zero over the 6-year life of the project. The grilling equipment will be salvaged for $147,000 at the end of the project. The Sub Shop project requires an initial investment of $33,500 in net working capital, which will be recovered at the end of the project. The tax rate is 40%. What is the Firehouse Sub Shop project's IRR if it is expected to generate an annual operating cash flow of $147,600? Multiple Choice 18.13% O O 16.80% O 14.53% O 18.17% 5.97%
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