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Hi, can you help me with this problem? Thank you for your help in advance! Question: Suppose you are evaluating a project for The Ultimate

image text in transcribedHi, can you help me with this problem?

Thank you for your help in advance!

Question: Suppose you are evaluating a project for The Ultimate Golf Club, guaranteed to correct the hacker's slice. You estimate the sales price of The Ultimate to be $400 and sales to be 1,000 units per year. You figure the project has a life of 3 years. Variable costs amount to $200 per unit and fixed costs are $100,000 per year. The project requires an initial investment of $150,000 which is depreciated straight-line over 5 years. The actual market value of the initial investment after year 3 is $75,000. Net working capital investment is $75,000. The tax rate is 34%. The required return is 16%. Should we pursue this project? Why or why not

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