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sa Five Stars Inc., is considering a new four - year expansion project that requires an initial fixed asset investment of 4 . 5 million.
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Five Stars Inc., is considering a new fouryear expansion project that requires an initial fixed asset investment of million. The fixed asset will be depreciated straightline to zero over its fouryear tax life. However, the fixed asset will have a market value of $ at the end of the project. The project is estimated to sell the new product for units a year and the price per unit is $ The variable cost is $ per unit and the fixed cost is $ a year. Suppose the project requires an initial investment in net working capital of $ and the net working capital will be fully recovered at the end of the project. If the tax rate is and the required rate of return on the project is what is the projects NPV
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