QUESTION 6 Lowell Inc, projects unit sales for a new project with a life of FOUR YEARS as follows Year Production will require Lowell must have an amount of NOWC on hand equal to 8 percent of the upcoming year's sales. Total fixed costs are $100,000 per year, variable production costs are $200 per unit and the units are priced at $300 each. The sale price and variable costs will increase by 2 percent every year. The equipment needed to begin production has an installed cost of $2,000,000. The equipment qualifies as 5-year MACRS property Years Depreciation rate 20% Unit Sale 0.000 12.000 14,000 16.000 3.2% 19% 12% in FOUR years, this equipment can be sold for about 18 percent of its soquisition cost Lowel is in timates, what is the NET SALVAGE VALUE of the project? 445,000 415,000 300,000 300.000 25 percent marginal tax bracket and I sa required retum on all its projects of 18 percent Based on these primary c