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You are considering a new product launch. The equipment will cost 5 2 0 , 0 0 0 , have a four year life, and
You are considering a new product launch. The equipment will cost have a four year life, and have a salvage value of zero. The equipment qualifies for the immediate percent bonus tax depreciation methos. Sales are projected at units per year, price per unit will be and cost excluding depreciation are estimated as follows: variable cost per unit will be and fixed cosy will be The firm marginal tax rate is and it uses a percent risk adjusted discount rate to evaluate projects of this type. Based on your experience you think yhat the unit price, the variable cost per unit and the fixed costs are probably accurate estimates to withis plus or minus What is the worstcase scenario for the first year operating cash flow?
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