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urget i need it now MMCC is investing the feasibility of a new line of power mulching tools aimed at the growing number of home

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image text in transcribed urget i need it now
MMCC is investing the feasibility of a new line of power mulching tools aimed at the growing number of home composent Based on exploratory conversations with buyers for large garden shops, it projects unt sales as follows: Year Unit sales 1 3,000 5.000 2 3 6,000 6.500 6,000 Oth 5,000 7 4,000 B 3,000 The new power mulcher will be priced to sell at S 120 per unit to start. When the competition catches up after 3 years, Carles at the price will drop to $ 110 (precisely at year 4). The power mulchet project will require $ 20.000 in net working capital at the start Subsequently total networking the end will be about 15% of sales of that year, The variable cost per unit is $ 80 Total fixed costs are $ 25,000 per year. It will cost about $ 800,000 to buy the equipment necessary to be sontent is princantly in India our enthusias as seven year MACRS property where the percentage of depreciation on w Year MACRS percentage 1 2 24.4 3 17.48 4 12.499 8.93% 5 7 8.92 8.83% 446 8 The equipment will actually be worth about 20% of its cost in eight years The relevant tax rate is 34%, and the required return is 15% Based on this information should MMCG proceed with this investment (ruint to calculate the NPyou should om OCE ME and CAPEX The sum up of these 3 categories will give you the total cash flow needed for NPV caculation

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