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Year o Year 1 Year 2 Year 3 Revenue 800000 800000 800000 Cost of Goods Sold -330000 -330000 Gross Profit 470000 470000 -330000 470000 -

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Year o Year 1 Year 2 Year 3 Revenue 800000 800000 800000 Cost of Goods Sold -330000 -330000 Gross Profit 470000 470000 -330000 470000 - 100000 -200000 -100000 -100000 Selling, General and Admin Depreciation -200000 -200000 EBIT 170000 170000 170000 -59500 -59500 -59500 Income tax (35%) Incremental Earnings 110500 110500 110500 O.A. $238,670 B. - $226,737 C. - $214,803 D. $262,537 -200000 -200000 -200000 170000 170000 170000 Depreciation EBIT Income tax (35%) Incremental Earnings -59500 -59500 -59500 110500 110500 110500 Capital Purchaes -600,000 Change to NWC -12,000 -12,000 -12,000 Cromwell Industries is considering a new project which will have costs, revenues, etc. as shown by the data above. If the cost of capital is 7.5%, what is the net present value (NPV) of this project? A. $238,670 B. - $226,737 c. - $214,803 D. $262,537

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