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Business, 06.12.2019 03:31 LSDWW123w

As a financial analyst, you must evaluate a proposed project to produce printer cartridges. the equipment would cost $55,000, plus $10,000 for installation. annual sales would be 4,000 units at a price of $50 per cartridge, and the project’s life would be 3 years. current assets would increase by $5,000 and payables by $3,000. at the end of 3 years, the equipment could be sold for $10,000. depreciation would be based on the macrs 3-year class, so the applicable rates would be 33%, 45%, 15%, and 7%. variable costs would be 70% of sales revenues; fixed costs excluding depreciation would be $30,000 per year; the marginal tax rate is 40%; and the corporate wacc is 11%. a. what is the required investment, that is, the year 0 project cash flow?

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