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Not sure how to solve Gateway Communications is considering a project with an initial fixed assets cost of $169 million that will be depreciated straight-line
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Gateway Communications is considering a project with an initial fixed assets cost of $169 million that will be depreciated straight-line to a zero book value over the 10 -year life of the project. At the end of the project the equipment will be sold for an estimated $227,000, The project will not change sales but will reduce operating costs by $381,000 per yeac, The tax rate is 23 percent and the required retum is 10.2 percent. The project will require $45,500 in net working capital, which will be recouped when the project ends. What is the project's NPV? Multuple Choice $400,224 5430508 $35577 537051 $416,233 Gateway Communications is considering a project with an initial fixed assets cost of $169 million that will be depreciated straight-line to a zero book value over the 10 -year life of the project. At the end of the project the equipment will be sold for an estimated $227,000, The project will not change sales but will reduce operating costs by $381,000 per yeac, The tax rate is 23 percent and the required retum is 10.2 percent. The project will require $45,500 in net working capital, which will be recouped when the project ends. What is the project's NPV? Multuple Choice $400,224 5430508 $35577 537051 $416,233 Step by Step Solution
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