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Please show work to solve and answer! value: 1.50 points Winthrop Company has an opportunity to manufacture and sell a new product for a five-year
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value: 1.50 points Winthrop Company has an opportunity to manufacture and sell a new product for a five-year period. To pursue this opportunity, the company would need to purchase a piece of equipment for $140,000. The equipment would have a useful life of five years and zero salvage value. It would be depreciated for financial reporting and tax purposes using the straight-line method. After careful study, Winthrop estimated the following annual costs and revenues for the new product: Annual revenues and costs Sales revenues Variable expenses Fixed out-of-pocket operating costs 270,000 $ 130,000 $ 72,000 The company's tax rate is 30% and its after-tax cost of capital is 15%. Click here to view Exhibit 8B-1 and Exhibit 8B-2, to determine the appropriate discount factor(s) using tables. Required Calculate the net present value of this investment opportunity. (Round discount factor(s) to 3 decimal places. Round your final answer to nearest whole dollar.) Net nt valueStep by Step Solution
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