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The Rodriguez Company is considering an average-rink investment in a mineral water spring project that has a cost of $170,000. The project will produce 750

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The Rodriguez Company is considering an average-rink investment in a mineral water spring project that has a cost of $170,000. The project will produce 750 cases of mineral water per year indefinitely. The current sales price is $141 per case, and the current cost per case is $108. The firm is taxed at a rate of 37%. Both prices and costs are expected to rise at a rate of 4% per year. The firm uses only equity, and it has a cost of capital of 17%. Assume that cash flows consist only of atter tax profits, because the spring has an indefinite life and will not be depreciated. a. What is the NPV of the project? Do not round intermediate calculations, Round your answer to the nearest dollar. (Hint: The project is a growing perpetuity, so you must use the constant growth formula to find its NPV) Should the firm accept the project? b. Suppone that total costs consisted of a fixed cost of $4,500 per year plus variable costs of 890 per unit, and only the variable costs were expected to Increase with intation. Would this make the project better or worsey continue to assume that the sales price will rise with inflation This will make the project select

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