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You got asked to analyze a 5-year project for your firm. The project produces an annual revenue of $28,000, but requires an annual labor and
You got asked to analyze a 5-year project for your firm. The project produces an annual revenue of $28,000, but requires an annual labor and materials cost of $6,000. To initiate the project your firm must invest $18,000. The salvage value of the project is $0 at the end of the 5-year useful life. Use straight line depreciation and a 40% income tax rate to compute the after-tax cash flows (15 points) and the IRR for the ATCF of this project (5 points)
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