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MMCC Co is planning to invest a project to produce desks, the expected unit sales are as follows. Year 3000 4000 5000 6000 This project
MMCC Co is planning to invest a project to produce desks, the expected unit sales are as follows. Year 3000 4000 5000 6000 This project will require $20000 in net working capital to start and additional new working capital investments each year equal to 15% of the projected sales increase for the followin g year. Total fixed costs are $25000 per year, variable production cost are 0 per unit, and the units are priced at $100 each. It will cost about $600,000 to buy the equipment needed to begin production. The equipment will be depreciated to zero over 6 year using straight-line depreciation. In four years, this equipment can be sold for about 20% of its cost. The marginal tax rate is 34% and the require return on the project is 15%. $6 Should MMCC Co accept the project
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