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help asap please RET Inc. has decided to manufacture and sell a new line of high-priced commercial stoves. Projected sales for the new line of
help asap please
RET Inc. has decided to manufacture and sell a new line of high-priced commercial stoves. Projected sales for the new line of stoves in annual units for the next 10 years are 4,000 a year. The sales price is $500 per stove, the variable costs are $400 per stove, and fixed costs are $200,000 annually. The plant and equipment required for producing the new line of stoves costs $3,000,000 (today) and will be depreciated down to zero over 10 years using straight-line depreciation. The plant and equipment is sold for $400,000 at the end of 10 years. Net working capital increases by $300,000 at the beginning of the project (year O) and it is reduced back to its original level in the final year. The tax rate is 40 percent and the discounting rate for the project is 14%. What is the annual Earnings before interests, taxes, and depreciation/amortization (EBITDA) in year 12 Step by Step Solution
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