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You are considering an investment proj ect with the foll owing fi nancial in fo rmation: (a) Req uired investment = $500,000 (b) Project life=

You are considering an investment proj ect with the foll owing fi nancial in fo rmation: (a) Req uired investment = $500,000 (b) Project life= 5 years (c) Salvage value= $50,000 (d) Depreciation method = straight-line depreciation (no ha lf-year convention) (e) U nit price = $40 (f) U nit variable cost = $18 (g) Fixed annual cost = $230.000 (h) Annual sales volume= I 00,000 units (i) Tax rate = 35% G) MARR = 15% Suppose the company is most concerned about the impact of its price estimate o n the projec1s ra te of return. How would you address this concern?

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