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Please show all work/steps, thanks! Perdita Corporation is considering a new project to make computerized, smart dog toys. Projections for the project are summarized in
Please show all work/steps, thanks!
Perdita Corporation is considering a new project to make computerized, smart dog toys. Projections for the project are summarized in the chart: Year Revenues Variable Costs Fixed Costs 1 200,000 40,000 10,000 2 220,000 44,000 10,000 3 240,000 48,000 10,000 4 220,000 44,000 10,000 5 200,000 40,000 10,000 The project will require capital equipment costing 300,000. It will be depreciated over five years to zero using straight line depreciation. In year 6, the equipment will be sold for scrap, for an estimated $30,000. Net working capital will be 20,000 in year 0 and ten percent of revenue after that. The corporate tax rate is 34%, and the appropriate discount rate is 12% Calculate the NPV of the projectStep by Step Solution
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