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permit sales of the additional output. The firm has tax loss carry forwards that render its tax rate zero, its cost of equity is 13%,
permit sales of the additional output. The firm has tax loss carry forwards that render its tax rate zero, its cost of equity is 13%, and it uses no debt. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. What is the incremental profit? $ round intermediate calculations. Round your answer to two decimal places. % Should the firm make the investment? b. Would the firm's break-even point increase or decrease if it made the change? c. Would the new situation expose the firm to more or less business risk than the old one? I. The new situation would obviously have less business risk than the old one. II. It is impossible to state unequivocally whether the new situation would have more or less business risk than the old one. III. The new situation would obviously have more business risk than the old one
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