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Problem 9-34 Project Evaluation (LO4) The following table presents sales forecasts for Golden Gelt Gifware. The unit price is $40, The unit cost of the
Problem 9-34 Project Evaluation (LO4) The following table presents sales forecasts for Golden Gelt Gifware. The unit price is $40, The unit cost of the giftware is $25 It is expected that net working capital will amount to 20% of sales in the following year, For example, the store will need an initial (Year 0) investment in working capital of .2023,000$40=$184,000. Plant and equipment necessary to establish the gifware business will require on additionat investment of $225,000. This imvestment wil depreciate on the MACRS schedule over 3 years. After 4 years. the equipment will have an economic and book value of zero. The firm's tax rate is 30%. The discount rate is 20%. Use the MAC depreciation schedule. a. What is the net present value of the project? Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar amount
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