The Drun's Den-Dutdoor Gear is considering a new 6-year project to produce a new tent ine. The equipment necessary would cost $1.29 million and be deprecated using saight ane depreciation to a book value ofpero At the end of the project, the equipment can be sold for t5 percent of its ential cost. The company believes that it can sell 23.500 tents per year at a poce of $64 and variable costs of $25 per et The ted costswill be $395.000 per year The project will require an intal investment is net working capital of $193,000 that will be recovered at the end of the project. The required rate of retums 107 percent and the taxes 35percent What is the NPV?OOO$40146$14,99SHOSOL

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Description: The Drun's Den-Dutdoor Gear is considering a new 6-year project to produce a new tent ine. The equipment necessary would cost $1.29 million and be deprecated using saight ane depreciation to a book value ofpero At the end of the project, the equipme

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The Drun'sDen Dadoor Gear is considering a new 6-year project to produce a new tentane the equipment necessary would cost $1.29 mon and be depreciated using seaghs ne depreciation to a bock value of zero At the end of the project, the equipment can be sold for 15 percent of its ential cost. The company believes that it can sell 23500 senes per year at a poce of $64 and viable costs of $25 persent. The fed costs will be $395.000 per year The project will require an inthal vvestment in net working capital of $92000 that will be recovered at the end of the project. The required rate of retums 107 percent and the taxae is 35 percent What is the NPVY Me Choce O O O 0 $467864 $403,46 $145, SH300 SOLS

The Drun'sDen Dadoor Gear is considering a new 6-year project to produce a new tentane the equipment necessary would cost $1.29 mon and be depreciated using seaghs ne depreciation to a bock value of zero At the end of the project, the equipment can be sold for 15 percent of its ential cost. The company believes that it can sell 23500 senes per year at a poce of $64 and viable costs of $25 persent. The fed costs will be $395.000 per year The project will require an inthal vvestment in net working capital of $92000 that will be recovered at the end of the project. The required rate of retums 107 percent and the taxae is 35 percent What is the NPVY Me Choce O O O 0 $467864 $403,46 $145, SH300 SOLS

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 17P

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