Question: You must analyze a potential new product - - a caulking compound that Cory Materials' R&D people developed for use in the residential construction industry.
You must analyze a potential new producta caulking compound that Cory Materials' R&D people developed for use in the
residential construction industry. Cory's marketing manager thinks the company can sell tubes per year at a price
of $ each for years, after which the product will be obsolete. The purchase price of the required equipment, including
shipping and installation costs, is $ and the equipment is eligible for bonus depreciation at the time of
purchase. Current assets receivables and inventories would increase by $ while current liabilities accounts payable
and accruals would rise by $ Variable cost per unit is $ and fixed costs would be $ per year. When
production ceases after years, the equipment should have a market value of $ Cory's tax rate is and it uses a WACC for averagerisk projects.
Please show how to solve the blanks, also check the ones I have filled in to make sure I did it correctly.
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