No working capital consequences

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Roman is considering to launch a new product. The selling price will be $30,000 per unit. The variable cost will be $15,000 per unit, and fixed cost will be $400,000 per year. The total investment needed to undertake the project is $2,000,000. This amount will be depreciated straight-line to zero over the 4-year life of the equipment. The savage value is zero, and there are no working capital consequences. The required return on this project is 20%.

Reference no: EM132293096

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