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Revenue generated by a new fad product, our forecast as follows year $50,000 in revenue year to $40,000 in revenue year $20,000 in revenue your

Revenue generated by a new fad product, our forecast as follows year $50,000 in revenue year to $40,000 in revenue year $20,000 in revenue your for $10,000 in revenue and zero there after expenses are expected to be 50% of revenues and working capital required in each year is expected to be 20% of revenue in the following year. The product requires an immediate investment of $40,000 in plant and equipment, solve for 1. what is the initial investment in the product remember working capital to if the plant and equipment are to be depreciated over four years to a salvage value of zero using straight line depreciation in the firms tax rate of 30%. 2. what are the project cash flows for each year ? 3. if the opportunity cost of capital is 12% what is the project net present value. 4. what is the internal rate of return?

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