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Suppose the VP of Baldwin Company is looking to evaluate a new project to produce bowling balls. Here are the relevant details: The cost of
Suppose the VP of Baldwin Company is looking to evaluate a new project to produce bowling balls. Here are the relevant details: The cost of the marketing test is $The new product will be manufactured in a building owned by the company. If not
manufactured, the building would be sold for $ The cost of the machine is $ and is expected to be used for years, after which
it is expected to be sold for $The price of a unit of production is $ and it is expected to grow at a rate of per year. The tax rate is and the production cost is $ per unit, which is expected to grow
at a rate of per year. Depreciation is calculated using the Modified Accelerated Cost Recovery System. Net working capital at the time of the investment is $ and in subsequent years, its expected to be of the total expected sales. What is the NPVof the project? Give your answer to the nearest cent.
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