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i need help finding a solution to this finance problem ABC Corporation has hired you to evaluate a new FOUR year project for the firm.
i need help finding a solution to this finance problem
ABC Corporation has hired you to evaluate a new FOUR year project for the firm. The project will require the purchase of a $757,600.00 work cell. Further, it wil cost the firm $59,700.00 to get the work cell delivered and instaled. The work cell wit bo stralght-lino depreclated to zero with a 20 -year usetur life. The project witt require new employees to be trained at a cost of $54,800,00. The proiect will also use a piece of equipment the firm already owns. The equipment has been fully depreclated, but has a market value of $6,700.00. Finally, the firm will invest $11,400,00 in net working capital to ensure the project has sulficient resources to be successful. The project will generate annual asles of $918,000.00 with expenses estimated at 36.00% of sales. Net working capital wal be held constant throughout the project. The tax rate is 39.00K. The work cell is estimated to have a makot value of $458,000.00 at the end of the fourth year. The firm expects to reclaim 90.00% of the finat NwC position. The cost of capital is 11.00%. What is the NPV the project if wo end the project after 4 years Step by Step Solution
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