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HM is a specialty kitchen cabinet maker that produces cabinets to order, it is a mature business that earned EBITDA of $900k on revenues f $ 5M in the most recent year and is expected to continue to generate these figures in perpetuity. The company is considering carrying some of its most popular models in inventory, with an eye on increasing sales and operating profit. It has - To carry inventory, the company will have to invest $2 M in a storage facility, which will be - With the inventory, the company expects its annual revenue to increase to $7.5 M and its -For the next decade, the inventory will be maintained at 10% of total revenues, with the collected the following information: depreciated straight line over 10 years overall EBITDA margin (EBITDA as % of sales) to increase to 20% investment made at the start of the year. It means, that investment in inventory increase is to be done once at the beginning of the project and won't change during the 10 years period. -The cost of capital for the company is 10% and it faces a 40% tax rate. Estimate the NPV of the project (carrying inventory) assuming at ten-year life for the investment. HM is a specialty kitchen cabinet maker that produces cabinets to order, it is a mature business that earned EBITDA of $900k on revenues f $ 5M in the most recent year and is expected to continue to generate these figures in perpetuity. The company is considering carrying some of its most popular models in inventory, with an eye on increasing sales and operating profit. It has - To carry inventory, the company will have to invest $2 M in a storage facility, which will be - With the inventory, the company expects its annual revenue to increase to $7.5 M and its -For the next decade, the inventory will be maintained at 10% of total revenues, with the collected the following information: depreciated straight line over 10 years overall EBITDA margin (EBITDA as % of sales) to increase to 20% investment made at the start of the year. It means, that investment in inventory increase is to be done once at the beginning of the project and won't change during the 10 years period. -The cost of capital for the company is 10% and it faces a 40% tax rate. Estimate the NPV of the project (carrying inventory) assuming at ten-year life for the investment