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Imagine a project that begins in year 0 and continues through year 4. In years 1-4 it generates extra sales of 120, 150,170 and 210;
Imagine a project that begins in year 0 and continues through year 4. In years 1-4 it generates extra sales of 120, 150,170 and 210; a reduction in labor expense of 20 per year and an increase of raw materials expense of 50 per year. Capex in year 0 is 100, which is depreciated to 0 using straight line over years 1-4. Compute annual EBIT and aggregate it (add up without any time value of money adjustments) over years 0-4. What is that value?
A) 330
B) 530
C) 430
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