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Garida Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: Year 2 Year 3 Year 4 Year
Garida Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: Year 2 Year 3 Year 4 Year 1 Unit sales. 4,800 5,100 5,000 5,120 22.33 $23.45 $23.85 $24.45 Sales price Variable cost per unit $9.45 $10.85 $11.95 $12.00 Fixed operating costs except depreciation $32,500 $33,450 $34,950 $34,875 Accelerated depreciation rate 33% 45% 15% 70% This project will require an investment of $25,000 in new Determine what the project's net present value (NPV) equipment. The equipment will have no salvage value at would be when using accelerated depreciation. the end of the project's four-year life. Garida pays a O $41,651 constant tax rate of 40%, and it has a weighted average O $36,218 cost of capital (WACC) of 11%. Determine what the O $43,462 project's net present value (NPV) would be when using O $32,596 accelerated depreciation
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