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Year o Revenues Cost of Goods Sold Depreciation Year 1 Year 2 Year 3 363,688.342363,688.342 363,688.342 150,000 -150,000 -150,000 -80,000 -80.000 -80,000 = EBIT 133,688.342133,688.342

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Year o Revenues Cost of Goods Sold Depreciation Year 1 Year 2 Year 3 363,688.342363,688.342 363,688.342 150,000 -150,000 -150,000 -80,000 -80.000 -80,000 = EBIT 133,688.342133,688.342 133,688.342 Taxes (35%) -46.790.91946,790.9196-46.790.9196 Unlevered net income + Depreciation Additions to Net Working Capital 86,897.422186,897.422186,897.4221 80,000 80.000 80,000 -20,000 -20,000 -20,000 Capital Expenditures 300.000 - Free Cash Flow 146,897.422146,897.422 146,897.422 Visby Rides, a livery car company, is considering buying some new luxury cars. After extensive research, they come up with the above estimates of free cash flow from this project. By how much could the discount rate rise before the net present value (NPV) of this project is zero, given that it is currently 10%? 12% 17% 27% 22% MacBook Pro

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