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new ABC plc is considering launching a new product that would require invesu.... machine at a cost of $160,000. The machine would have an estimated
new ABC plc is considering launching a new product that would require invesu.... machine at a cost of $160,000. The machine would have an estimated four year lite ..... residual value. Forecast sales volume for each of the four years is 6,000 units. The product would have a unit sales price of $60 and a variable unit cost of $40. If the product is launched, the incremental fixed overheads would be $60,000. The cost of capital is 10.0 %. Present a report to the directors of ABC plc giving: (a) the net present values; (b) the percentage amount each variable can deteriorate before the project becomes unacceptable; (fixed cost, selling price, variable cost) (c) a sensitivity graph
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