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You are evaluating a product for your company. You estimate the sales price of product to be $240 per unit and sales volume to be

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You are evaluating a product for your company. You estimate the sales price of product to be $240 per unit and sales volume to be 11,400 units in year 1; 26.400 units in year 2; and 6,400 units in year 3. The project has a 3 year life. Variable costs amount to $165 per unit and fixed costs are $214,000 per year. The project requires an initial investment of $366,000 in assets which will be depreciated straight-line to zero over the 3 year project life. The actual market value of these assets at the end of year 3 is expected to be $54,000. NWC requirements at the ch year will be approximately 13 percent of the projected sales during the coming year. The tax rate is 30 percent and the required return on the project is 8 percent. What will the year 2 cash flows for this project be? Multiple Choice O $1150,800 0 o $1,644,000 0 O $1,272,800 0 $1,896,800 0

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