Question: When you read the question, at the end, they said, do we accept this project through this information? 8. Project X involves a new type

When you read the question, at the end, they said, do we accept this project through this information?

When you read the question, at the end, they said, do we

8. Project X involves a new type of graphite composite in-line skate wheel. We think we can sell 6,000 units per year at a price of $1,000 each. Variable costs will run about $400 per unit, and the product should have a four-year life. Fixed costs for the project will run $450,000 per year. Further, we will need to invest a total of $1,250,000 in manufacturing equipment. This equipment is seven-year MACRS property for tax purposes. In four years, the equipment will be worth about half of what we paid for it. We will have to invest $1,150,000 in net working capital at the start. After that, net working capital requirements will be 25 percent of sales. Assume a 28 percent required Return and a 21 percent tax rate throughout

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