### Straight-line to zero over the life of the project

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We are evaluating a project that costs \$800,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 60,000 units per year. Price per unit is \$40, variable cost per unit is \$20, and fixed costs are \$800,000 per year. The tax rate is 35 percent, and we require a return of 10 percent on this project.

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