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Skipfit is considering expanding their business into the production of post workout protein bars. To do this, SkipFit needs to convert an existing warehouse to

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Skipfit is considering expanding their business into the production of post workout protein bars. To do this, SkipFit needs to convert an existing warehouse to allow for manufacturing of these nutritional supplements. They expect the renovations to cost $150,000, which if the project is undertaken, will be immediately expensed for tax purposes. In addition th shis, the upfront equipment costs are $450,000 with an additional $50,000 for installation costs. SkipFit will depreciate the equipment over 10 years for tax purposes using straight line depreciation. However, SkipFit plans to terminate the project at the end of eight years and sell the equipment for $120,000. Revenue generated from the sales of the protein bar expects to be a constant $750,000 per year over the eight years. Expenses (excluding depreciation) are 70\% of revenue generated. If the corporate tax rate is 30% and the required rate of return on the project is 5% per six months, should SkipFit invest in the project? Why

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