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Jamuna Group is evaluating the proposal of a new RMG factory called Jamuna Fabrics. Jamuna Group is renting a premise of 50,000 Square feet in

Jamuna Group is evaluating the proposal of a new RMG factory called Jamuna Fabrics. Jamuna Group is renting a premise of 50,000 Square feet in Savar and Jamuna Fabrics is planning to use 10,000 Square feet from this facility. The rest of the premise will be used by another RMG factory of Jamuna Group called Jamuna Exclusive Fabrics. From these two factories, annually Jamuna Group expects to have a total output of 50,000 units of cloths at USD 3 per cloth and Jamuna Fabrics will have 40% of this total output. Total capital cost is USD 25,000 and is depreciated using the straight-line method over five years to a salvage value 0f USD 5000. The monthly salary expense will be USD 2500, whereas annual utility and other expense will be USD 2,000. The annual total rent of 50,000 Square feet premise is USD 25,000. During the feasibility study the corporate finance department has found that the annual city corporation house tax is USD 2,000 in Savar and Jamuna Fabrics will need to annually pay USD 7000 as staffs festival bonus. Variable costs are 10 per cent of annual sales revenue. Assume, initially you require USD 5,000 in working capital for this project. However, after the project you will receive USD 2000 from the working capital. You will also receive USD 10000 from selling your factory machinery after five years. Besides, there are no additional cash inflows and outflows from this project. The required rate of return Jamuna Exclusive Fabrics is 12% and for Jamuna Fabrics is 15 per cent. The tax rate is zero per cent and project life cycle is five years. Calculate the NPV for Jamuna Fabrics. Show detailed calculation.

........................Course: CORPORATE FINANCE. Give me the answer on a paper and send me the pic if possible. so that i can understant easily. thank you........

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