Question: A real-estate project cost $950,000, has a five year life with no salvage value and straight line depreciation to zero. The Required return is 17%

A real-estate project cost $950,000, has a five year life with no salvage value and straight line depreciation to zero. The Required return is 17% and tax rate is 34%. Sales are projected at one million units per year. Price per unit is $2.50 and variable cost per unit is $1.50. The fixed Costs is $600,000 per year. SHOW WORK

1. Show income statement here below:

2. What is the NPV of this project?

3. What is the IRR of this project?

4. Would you take this project and if so, explain why or why not?

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