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Determine net present value

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Question - A company is considering 7 year property for tax purpose and expecting to sell the property at the end of fourth year. The salvage value is zero. Assume all cash flows occur at the end of the year. Given investment 240000, revenues 110000, and variable costs 25000, fixed out-of-pocket cost 20000, investment in working capital 30000, WACC 16%, tax rate 40%. Determine net present value and recommendation to the company?

Reference no: EM131920342

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