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Question 1 (25 points): Consider an investment that has a project life of 10 years and requires an investment of $1,000,000 at time zero for

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Question 1 (25 points): Consider an investment that has a project life of 10 years and requires an investment of $1,000,000 at time zero for machinery and equipment to be depreciated over 8 years with half year convention straight line depreciation method (starting in year 1 and continuing to year 9). Annual revenue is estimated to be S500,000 and annual operating costs of $75,000. $200,000 is needed for working capital at time zero and is expected to freed- up (returned) at the end of the project (year 10). The salvage value of the machinery and equipment will be zero while an environmental remediation cost of $75,000 will be required to be paid at the end of year 10 as an additional operating cost. The minimum After Tax Cash Flow ROR is 12% and the effective income tax rate is 25%. Calculate the After Tax Cash Flow NPV, and ROR of the project

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