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You are considering manufacturing a new virtual game center. You have put together the estimates in the following table about the potential demand and the
You are considering manufacturing a new virtual game center. You have put together the estimates in the following table about the potential demand and the associated selling and manufacturing prices, You expect to sell the center for five years. The equipment required for the manufacturing process can be depreciated using straight-line depreciation and will have a zero salvag value. there's an additional capital expenditures of $150,000 for both year two and three. The required return for projects for this type is 18%, and the company has a 25% marginal tax rat. You estimate that there is a 60 percent chance the project will achive good sales and a 20 percent chance it will achieve either weak or strong sales outcomes. Should you recommend the project? (50 points) Maximum file size: 50MB, maximum number of files: 1
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