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Your corporation is considering investing in a new product line. The annual revenues (sales) for the new product line are expected to be $178,897.00 with

Your corporation is considering investing in a new product line. The annual revenues (sales) for the new product line are expected to be $178,897.00 with variable costs equal to 50% of these sales. In addition annual fixed costs associated with this new product line are expected to be $62,910.00 . The old equipment currently has no market value. The new equipment cost $77,457.00 . The new equipment will be depreciated to zero using straight-line depreciation for the three-year life of the project. At the end of the project the equipment is expected to have a salvage value of $14,459.00 . An increase in net working capital of $68,091.00 is also required for the life of the project. The corporation has a beta of 1.684 , a tax rate of 26.53% , and a target capital structure consisting of 42.73% equity and 57.27% debt. Treasury securities have a yield of 1.43% and the expected return on the market is 11.76% . In addition, the company currently has outstanding bonds that have a yield to maturity of 4.97%. For answers that are dollar amounts, please round to the nearest two decimal places. For answers that are a percentage, please be sure to enter your answer as a percentage (for example, .1234 becomes 12.34%). What is the total initial cash outflow? (show as negative number): $ What are the estimated annual operating cash flows? $ What is the terminal cash flow? $ What is the corporations cost of equity? $ What is the WACC? % What is the NPV for this project? $

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