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We are examining a new project. We expect to sell 5, 400 units per year at $68 net cash flow apiece for the next 10
We are examining a new project. We expect to sell 5, 400 units per year at $68 net cash flow apiece for the next 10 years. In other words, the annual operating cash flow is projected to be $68 times 5.400 = $367, 200. The relevant discount rate is 18 percent, and the initial investment required is $1?530,000. a. What is the base-case NPV? b. After the first year, the project can be dismantled and sold for $1, 250,000. If expected sales are revised based on the first year's performance, below what level of expected sales would it make sense to abandon the project
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