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Stake Technology Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $1, 550,000. The fixed asset falls into

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Stake Technology Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $1, 550,000. The fixed asset falls into Class 10 for tax purposes (CCA rate of 30 percent per year), and at the end of the three years can be sold for a salvage value equal to its UCC. The project is estimated to generate $1, 900,000 in annual sales, with costs of $590,000. The tax rate is 24 percent. a) What is the OCF for each year of this project? b Now suppose the required return on the project is 15 percent What is the projects NPV? c) Finally, suppose the project requires an initial investment in net working capital of $240,000 and the fixed asset will have a market value of $400,000 at the end of the project. What is the projects new NPV

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