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You are the financial analyst for a tennis racquet manufacturer. The company is considering using a graphite-llke materlal in its tennis racquets. The company has
You are the financial analyst for a tennis racquet manufacturer. The company is considering using a graphite-llke materlal in its tennis racquets. The company has estimated the information in the following table about the market for a racquet with the new material. The company expects to sell the racquet for six years. The equipment required for the project has no salvage value. The equipment will be depreclated straight-line to zero over the project's Iffe. The required return for projects of this type is 12 percent, and the company has a 40 percent tax rate. Assume the company has other profitable ongoing operations that are sufficlent to cover any losses. Should you recommend the project? Calculate the NPV under each scenarlo. (Round the final answers to 2 decimal places. Negatlve amounts should be Indlcated by a minus sign. Omit \$ sign In your response.)
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