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Use the following information for the next four questions: The Umbrella Corporation is considering expanding one of its production facilities to research a new type
Use the following information for the next four questions: The Umbrella Corporation is considering expanding one of its production facilities to research a new type of zombie, which will hope not result in another zombie outbreak. The project would require a $21,000,000 capital investment and will be depreciated (straight- to zero) over its 3 year life. They know that they will be able to salvage $8,500,000 for the equipment at that time. Incremental sales are expected to be $15.750,000 annually for the 3 year period with costs (excluding depreciation) of 30% of sales, company would also have to commit initial working capital to the project of $2,500,000. The company has a 30% tax rate, and requ 12.5% rate of return for projects of this risk level. Project cash flow (Cash Flow From Assets) for Year 1 is: Select one: a. $7,800,231 O b. $4,756,384 O c. $5,800,600 O d. $9,817,500 e. $6,800,470
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