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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 $ million on an some land three years ago for $ million and the company belles $ million after taxes. Sales department expects that aftertax basis. In four years, the land could be sold for $ units each year for the next four years, respectively. company will be able to sell and at the end of the fouryear period, sales should be They calculate each latex set can be sold at $ and, at the project will be $ per year, and discontinued. The company managers believe that fixed costs for production will cost $ million and will be variable costs are percent of sales. The equipment necessary for prodent can be sold for $ Net working depreciated at straightline method. At the end of the project, the equ percent tax bracket, and the required return on the project is percent. Should the company start the business?
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