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You are asked to evaluate the following project for a corporation with profitable ongoing operations. The required investment on January 1 of this year is

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You are asked to evaluate the following project for a corporation with profitable ongoing operations. The required investment on January 1 of this year is $42.000 The firm will depreciate the investment at a CCA rate of 20 percent. The firm is in the 40 percent tax bracket The price of the product on January 1 will be $112 per unit. That price will stay constant in real terms Labour costs will be $940 per nour on January 1. They will increase at 15 percent per year in real terms Energy costs will be $610 per physical unit on January they will increase at 25 percent per year in real terms. The inflation rate is 55 percent. Revenue is received and costs are paid at year- 29 end 128 Physical production, in units Labour input. In hours Energy input, physical units Year 2 Year 240 290 1,340 1.140 180 10 320 1.50 100 180 The nisk-free nominal discount rate is 8.8 percent The real discount rate for costs and revenues 15 58 percent. Calculate the NPV of this project (Do not round intermediate calculations. Round the answer to 2 decimal places. Negative amount should be indicated by a minus sign. Omit $ sign in your response.) Net present value

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