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You have been hired as a consultant for Vandalay Industries, melieves it could sell the land for $ 1 million on an some land three

You have been hired as a consultant for Vandalay Industries, melieves it could sell the land for $1 million on an some land three years ago for $0.8 million and the company belles $1.2 million after taxes. Sales department expects that aftertax basis. In four years, the land could be sold for $1.2200 units each year for the next four years, respectively. company will be able to sell 6000,5500,4300, and 2200, at the end of the four-year period, sales should be They calculate each latex set can be sold at $220 and, at the project will be $370000 per year, and discontinued. The company managers believe that fixed costs for production will cost $3.6 million and will be variable costs are 10 percent of sales. The equipment necessary for prodent can be sold for $250000. Net working depreciated at straight-line method. At the end of the project, the equ 38 percent tax bracket, and the required return on the project is 13 percent. Should the company start the business?
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