NA Problem 1. polis The Motion County Journal mit The EXAMIA delete NAME: Problem 1. 50 points. Telur shirt The Madison County Journal Constitution (a daily newspaper company) is considering introducing a new monthly magazine. The company anticipates that it will cost $20 million in initial cost to create and produce this magazine, and that it can depreciate this cost straight line over the next 10 years to a salvage value of $5 million. The company expects to price the magazine at an average of $2 an issue and expects an average advertising revenue of $1.50 per issue sold. The printing and production costs are expected to be S1 per issue. The magazine will be produced by the existing staff of the newspaper resulting in an increase in actual payroll cost by 10% from its current level of $20 million. The company's cost of capital is 10% and the marginal tax rate is 40%. Should the company accept the project if it expects to sell 2,400,000 copies of the magazine each year for the next 10 years? (30 points). a. b. What is the minimum number of magazines the company must sell each year to make the project acceptable? (20 points). BUSA53SPRING NA Problem 1. polis The Motion County Journal mit The EXAMIA delete NAME: Problem 1. 50 points. Telur shirt The Madison County Journal Constitution (a daily newspaper company) is considering introducing a new monthly magazine. The company anticipates that it will cost $20 million in initial cost to create and produce this magazine, and that it can depreciate this cost straight line over the next 10 years to a salvage value of $5 million. The company expects to price the magazine at an average of $2 an issue and expects an average advertising revenue of $1.50 per issue sold. The printing and production costs are expected to be S1 per issue. The magazine will be produced by the existing staff of the newspaper resulting in an increase in actual payroll cost by 10% from its current level of $20 million. The company's cost of capital is 10% and the marginal tax rate is 40%. Should the company accept the project if it expects to sell 2,400,000 copies of the magazine each year for the next 10 years? (30 points). a. b. What is the minimum number of magazines the company must sell each year to make the project acceptable? (20 points). BUSA53SPRING