A project has annual NPV break-even level of sales of $3,000,000. The annual net cash flows can be calculated as (0.16 x sales- $392,000). The project has a 5-year life and the company's cost of capital is 8.70%. Ignoring the impact of depreciation and taxes, what is the most that should be invested in this project today? a $229,980 b. $1,320,000 c. $440,000 d. $344,970 e $880,000
A project has annual NPV break-even level of sales of $3,000,000. The annual net cash flows can be calculated as (0.16 x sales- $392,000). The project has a 5-year life and the company's cost of capital is 8.70%. Ignoring the impact of depreciation and taxes, what is the most that should be invested in this project today? a $229,980 b. $1,320,000 c. $440,000 d. $344,970 e $880,000
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 13P
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